London politicians have welcomed the government’s decision to scrap so-called “pay to stay” plans under which rents would have risen substantially for council tenants on comparatively high incomes.
In the capital the policy was to apply to all households earning more than £40,000, but lobbying organisation London Councils had warned tens of thousands of people in the city, including nurses and primary school teachers, would have been affected, and others said the policy was unworkable.
Following a gradual government climbdown on the measure, Housing Minister Gavin Barwell earlier this week confirmed councils would not be compelled to implement the change, though they can still do so if they wish.
Use of fixed term tenancies for new tenants in local authority housing will be mandatory, however.
Barwell said: “The government’s guidance to councils will make clear that they should take into account a household’s financial circumstances when looking at this, and that, except in exceptional circumstances, tenancies should be targeted on those on lower incomes.
“We will also consider whether other options exist to ensure that high income tenants in social housing make a greater contribution to costs.”
Sir Steve Bullock, the Mayor of Lewisham and the housing boss at lobbying group London Councils, said: “London Councils welcomes the scrapping of the ‘pay to stay’ proposals, which would have penalised many lower earners; there are approximately 790,000 households living in social rented properties in London.
“We estimated about 28,000 of these would have been affected and faced huge levels of uncertainty as a result of this the legislation.
“Many social housing tenants in the capital live in thriving economic communities undertaking a range of different jobs at different incomes – part of what makes London’s economy function effectively.
“Pay to stay would have impacted heavily on boroughs’ ability to maintain mixed communities if people were forced to move as a result of the increase in their rent.
“Scrapping these proposals mean boroughs will be able to direct resources towards meeting housing need rather than implementing an admin-heavy new scheme.”
Sian Berry, a housing campaigner and Green Party member of the London Assembly, also said she was delighted the plans had been ditched while on a visit to the Northwold Estate in Hackney, which is earmarked for possible redevelopment.
Hackney MP Meg Hillier said: “I welcome this U-turn and have written to Hackney Council and local housing associations urging them to commit to not implement the voluntary scheme.”
Mayor of Hackney Philip Glanville called the scrapping of the plans “a victory for the low-paid working families”.
He added: “We’ve been working hard behind the scenes to demonstrate to ministerial officials the damage this tenant tax would have on families in Hackney and the bureaucratic nightmare it would place on tenants and local authorities – the reasons I marched, campaigned and gave evidence in Parliament against this legislation.”