From our Welfare Manifesto (2010 version, pdf)
6.5 UKIP therefore recommends that social rents be set at a single inclusive figure (rent plus Council Tax, net of notional Council Tax and Housing Benefit) calculated at around 20 per cent of each household’s gross income: This would ease the poverty trap for the most needy; social tenants on very low incomes would keep 49p for every £1 earned (assuming a flat tax rate of 31%) rather than 4.5p as at present.
It would also encourage households on higher incomes to move into the private rented sector or owner-occupation, as above a certain level of income, the social rent they are paying would be higher than a comparable rent in the private sector or the cost of a repayment mortgage. This may seem unfair, but it is exactly these households who will benefit most from UKIP’s proposal to double the tax-free personal allowance, so taking the two measures together, very few households will lose out.
The preceding paragraphs 6.1 to 6.4 are worth a read if you want to see the workings. I explained how the extra 'about 20%' could be collected with the minimum of administrative hassle by using K-codes for PAYE on my 'blog here (scroll down a bit to the section beginning "Here's my crash course in the existing PAYE system").
Lo and behold, from yesterday's Daily Mail*:
Conservative-led Westminster Council has asked Government for new powers to introduce a sliding scale which would link social housing rents to incomes. The move comes after the council found it had 2,200 social housing tenants earning more than £50,000-a-year, and more than 200 on over £100,000...
Many of those on £100,000 or more were paying rents of £97-a-week for a one bedroom flat, or £110-a-week for a two bedroom place, said Mrs Roe. She said a new formula should be applied which would see tenants paying 35 to 40 per cent of their net income on accomodation, the national average.
They say 35 to 40 per cent of their net income, we said 20 per cent of their gross income, which comes to the same thing in £-s-d, only 20 per cent of gross income is far easier to calculate.
From the point of view of the council, there must be a revenue maximising point; i.e. if they set the rate too low then they won't get much rental income and much longer waiting lists; if they set it set it too high then they'll discourage out of work and low earning tenants from earning more and you'll lose all your better earning tenants.
Sure, there may be some middle to higher earners who would end up paying above market rents on the place they're in in the short term, but - even if they don't move out - the advantages to them are:
a) The council will be more inclined to upgrade them if a nicer council house or flat becomes available, and
b) It's like unemployment protection insurance with a mortgage; you overpay while you are still working, but if you lose your job, take a pay cut or retire and draw your pension, then you get your money back.
c) It's got to be better than being turfed out entirely, as the Tory government has vaguely suggested, a strategy with pretty obvious unintended consequences...
d) The local council will then give preference to people on the waiting lists who have jobs, so you'll probably end up with nicer neighbours.
* Spotter's Badge, MBK.
Sounds as if he's been reassured
5 hours ago
6 comments:
Oh, good heavens! Yet another Ukip idea being nicked and presented as someone else's then?
Pity we couldn't get copyright on that document!
WFW, there's no copyright in ideas, and Westminster Council being Westminster Council, the chances are they'll completely mess it up and it'll just be an excuse to employ loads more civil servants to spy on the tenants who don't currently claim Housing Benefit :-)
In this area, people on NMW, working 24 hours [the average] is paying £500 rental. That's not 35-40%, Mark - it's way more than that.
JH, well that just shows you how out of touch Westminster Council is.
Hence my suggestion of 20% of gross for all inclusive council house rent + council tax. If you work for £6/hour x 24 hours/week x 4.345 weeks/month, you earn £626/month and would pay £125 a month in rent/council tax, which I think is a tolerable burden.
Paying £500 rent out of £625 gross is clearly 'wrong'.
You know why these statistics have finally been researched though don't ya?
Bob Crow!!
SW, indeed, this is partly motivated out of spite (although Bob lives in North East London, not in Westminster).
But I don't think Bob would care, he's already paying so much tax + full social rent+ full council tax that he'd probably be +/- no worse off if they just took 50% of his salary to cover tax + rent+ council tax. In any event, my policies are not motivated out of spite, it may well be that Bob ends up a few quid better off, and if not, he can give himself a payrise.
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