Treasury profiteering from hard-pressed tenants - Burstow

1.12.00pm GMT Fri 6th Feb 2009

Paul Burstow, MP for Sutton and Cheam, is stepping up the pressure on the government to stop the Treasury clawing back thousands of pounds of rent from council tenants.

Mr Burstow raised the matter in the Commons and tabled a Parliamentary Motion calling for reform of council housing finance system whereby council tenants in the borough are net contributors to the Exchequer because they are paying more in rent than the Treasury pays out in subsidy.

The latest figures for the borough show local tenants paying £10.5 million of their rent to the Treasury. The payment is known as negative housing subsidy.

In 2008-09 the Treasury will make an estimated profit of £185-£200 million from council rents. For tenants in the London Borough of Sutton, this year £10.5 million from their rent will effectively be paid straight to the Treasury.

Mr Burstow said:

"The latest figures show that in the year to come council tenants in the London borough of Sutton will be paying £10.5 million of their rent to the Treasury, which, in effect, means that council tenants in Sutton, Cheam and Worcester Park will be paying their April to August rents to the Treasury.

"It is outrageous that the government is knowingly profiting from council tenants. Rent payers rightly expect to see the government investing the money they pay into improving the quality of homes. Instead the Treasury is lining its pockets while seemingly dragging its feet over the review of housing revenue account subsidy.

"Sutton Federation of Tenants and Residents Associations and I will be presenting a petition to Downing Street in March next month