Bermondsey MP Simon Hughes and tenants back the Lib Dem rent cut

Council tenants in Southwark would see their rent CUT under new plans put forward by Liberal Democrats.

The opposition group has put forward proposals to reduce rents by 1% in all council-owned homes in the borough, in contrast to the 4.85% increase being added by the Labour administration – a saving of £285 per year for the average council tenant.

It sets out a striking policy contrast between the two parties in the run up to a key budget setting meeting of the full council next week (Wed 27 Feb).

The Lib Dem group have worked up the proposals using spare cash from the Housing Revenue Account (HRA), which makes an annual surplus of more than £7m because the amount of rent collected is higher than the money being paid out for upkeep of homes. Opposition councillors say that the extra money that has been collected from tenants should be given back in the form of a one-off rent cut.

The HRA is a separate budget from the general ‘Revenue Account’ of the council and can only be used for housing-related spending rather than general services. Councils were previously obliged to increase rents in line with a government formula, but rule changes brought in by the Coalition mean councils now have power to set their own rent levels without facing financial penalties.

Labour’s 4.85% rent increase will add £231.92 to the annual rent bill for the average council property (£4.46 per week), set to begin on 1 April. The Lib Dems’ 1% cut would reduce rents by £47.84 per year, saving the average tenant £285 in 2013/14 compared to Labour plans.

The rent cut policy comes on the back of income tax cuts to low income households pushed through by Lib Dem ministers in government, which will see the basic income tax threshold rise to £10,000 in this Parliament, saving many households up to £700.

Commenting, leader of Southwark Liberal Democrats Councillor Anood Al-Samerai said:

“The Lib Dems know that many people are finding it tough at the moment, which is why we want to put money back into the pockets of those who need it most.”

“Rather than imposing an increase in council rents, we would actually cut rents to give people a helping hand. Along with the income tax changes brought in nationally by Lib Dems in government, our rent cut would be a welcome boost for residents throughout Southwark.”

“Labour councillors are increasing rents by almost 5% when they know people are suffering financially.”