The Government abandoned its controversial ‘pay to stay’ policy, which would have imposed crippling rent hikes on working council tenants.
In Sandwell, the proposal – dubbed the ‘tenant tax’ – would have seen the rents of those affected rise by an average of £1,553 a year.
In a statement, Housing Minister Gavin Barwell said: “Social housing has a crucial role to play in supporting those in most housing need. To that end, powers were provided for in the Housing and Planning Act 2016 to introduce an income based rents policy, requiring local authorities to set higher rents for higher income council tenants.
“Since the summer, the Government has been reviewing this policy. We have listened carefully to the views of tenants, local authorities and others and as a result, we have decided not to proceed with a compulsory approach. Local authorities and housing associations will continue to have local discretion.”
Responding to the announcement local MP John Spellar said:
“I am pleased that this disastrous proposal has been ditched, as it would have had a devastating impact on the people of Sandwell.
“29,410 people would have been subject to the rent hikes, putting a strain on their finances and in all likelihood forcing many out of their homes.
“That is why Labour has opposed this plan from the outset and I strongly welcome this change of heart from the Government.”
Shadow Housing Secretary John Healey added:
“This welcome u-turn is a victory for Labour’s year-long campaign against the ‘tenant tax’ which was set to hike rents for thousands of middle income households.
“Having recognised this move was a big mistake, Ministers must now re-think the rest of their failed housing decisions over the last six years.
“After disastrous figures last week showing that the number of new affordable homes for social rent has fallen to the lowest level since records began, top of the list must be reversing the forced sale of vital council homes and the huge cuts to investment in new genuinely affordable homes.”