“Housing Benefit will take the Strain”

On 30 January thirty years ago, the then Housing Minister, Sir George Young, uttered this infamous phrase in a short debate initiated by a back-bench MP by the name of Jeremy Corbyn.

Mr Corbyn’s concern was the increase in rents during 1990-91 which he feared were outstripping increases in earnings.

To set this in context, rent controls had been in place since 1915, known from 1965 as ‘fair rents’. Rent controls were abolished for new tenancies by the Housing Act 1988. The notion of rent increases outstripping incomes was therefore a very novel and worrying situation.

The response from the Housing Minister was not to review the impact of the first few years of uncontrolled market rents but instead, to state,

“I do not accept the premise on which the hon. Gentleman based his question. Housing benefit will underpin market rents-- we have made that absolutely clear. If people cannot afford to pay that market rent, housing benefit will take the strain.”

Perhaps someone with a better understanding of the rented sector would have realised that such a reassurance would send a signal to landlords that “the sky’s the limit” and not surprisingly, rents started rising rapidly. The housing benefit bill almost doubled within five years.

The response by successive Governments has not been to return to rent controls, but merely to slice back housing benefit/Universal Credit. These benefit cuts have had no impact on dampening rent levels, they have simply driven an increasing reliance on food banks and forcing renters to cut back of other essentials such as heating.

With the Government’s commitment to new legislation to protect renters through a Renters Reform bill, perhaps this is the opportunity to revert to a fair system for rents.