Tower Hamlets Mayor John Biggs has rejected the Government’s Pay to Stay tax that penalises higher earning social tenants and pledged it will not be adopted in the borough.
At a Tower Hamlets Council meeting on December 5, Biggs called the controversial policy a “tax on aspiration” that risked pushing families struggling to make ends meet into poverty.
The contentious tax, set to be introduced in April 2017, will see London council tenants earning over £40,000 charged market or near market rents. The Institute for Fiscal Studies (IFS) calculates the policy will affect 10 per cent of social housing residents.
The Government went back on its plans – introduced in the July 2015 budget – to force councils to charge higher-income tenants market or near market rates following a backlash from opposition MPs and local councils.
John Biggs: “The Pay to Stay proposals are little more than a Tory tax on tenants”
Instead of making the policy mandatory for all local authorities, the Government confirmed recently that it would give councils the option to introduce the charge.
Council tenants in Tower Hamlets would have been charged 15p for every pound their household earns over £40,000, which becomes an average rent increase of £132 a month in the capital – considerably higher than the rest of the country.
Opposition to the policy was also due to the huge bureaucratic task it would have taken to implement the changes.
Speaking at a Tower Hamlets Council meeting on December 5, Biggs argued: “The Pay to Stay proposals are little more than a Tory tax on tenants. Instead of punishing those in council homes the Government should be focused on bringing private sector rents down to sensible levels.”
“I do not believe it is fair to punish families who live in council homes for seeking to improve their circumstances,” said Biggs, “it is a tax on aspiration and risks pushing families already struggling to make ends meet into poverty.”
“Pay to Stay has no place in the East End and Tower Hamlets will not be introducing it as long as I am Mayor,” he continued.
Lewisham, Hackney and Croydon councils all welcomed the U-turn by Theresa May’s Government in November.
Croydon Central MP Gavin Barwell, Minster for Housing and Planning, said when announcing the policy was being scrapped: “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.”
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