Osborne set to annouce the plans in the new Budget
SOCIAL housing will face another attack from the millionaires of Downing Street, it was announced yesterday, as Chancellor George Osborne plans to make tenants earning above-average wages pay market-rate rents.
Council and housing association tenants who happen to be earning a slightly higher than average wage would be forced to pay as much as those in the inflated private sector, he is expected to announce in his emergency Budget on Wednesday.
Londoners on salaries of at least £40,000 would be affected from 2017-18, as well as social housing tenants in the rest of England on more than £30,000.
However, the decisions would be based on gross earnings before tax and NI deductions, a Treasury spokeswoman told the Star, which would disproportionately affect those on the salary threshold who live in homes in expensive regions, such as London and south-east England.
More than 300,000 people earning at least £30,000 currently live in social housing — however tax deductions leave them with an average of £24,000 in take-home pay.
As the penalty is based on total household incomes, tenants living on their own would have to shoulder the full market rate without any assistance.
The pressure of making social housing tenants pay rapidly rising market rents would make them consider getting a lower-paid job in a “race to the bottom” or could encourage them to take advantage of right to buy, which contributed to the vast housing crisis, critics have said.
The policy will be “reviewed annually through an annual income statement from tenants,” the Treasury spokeswoman told the Star. This was in response to a question about how the scheme will be imposed on tenants who are self-employed with fluctuating earnings or could lose jobs.
The money generated by the scheme — expected to reach £250million a year by the following year — would then be snatched away from cash-strapped local authorities and siphoned off to the Treasury in order to help chip away at national debt.
This is contrary to the alleged Conservative Party “promise” that they will deliver “economic security for working people,” which the Chancellor parroted on the Andrew Marr Show yesterday, despite dancing around the question on whether the top rate of tax for those earning more than £150,000 a year will be reduced to 40 per cent.