Scrapping the tenant tax should mean new homes in South Lakeland - Farron

South Lakes MP Tim Farron has long campaigned for the scrapping of the Tenant tax - and has warmly welcomed the government's decision this week to end this unfair practice.

Until now, 30% of every council tenant's rent has been taxed by the government, which forces up rents and reduces the council's ability to build new homes. The unpopular "Tenant Tax" will be scrapped, with local authorities being allowed to keep all council house rents and sales receipts they collect to reinvest in social housing, under plans announced by the coalition government. Tim Farron took part in a key meeting in 10 Downing Street in September which led to this decision being made.

The proposal, which sees the coalition delivering on a major Liberal Democrat manifesto commitment, will result in the Housing Revenue Account subsidy being scrapped in favour of greater financial freedom for councils. Under the previous system, all council tenant rent was paid into a local housing pot, from which the government was allowed to make deductions to fund subsidies for other local authorities. The government also retained some of the money centrally.

Full details of the new system will be announced as part of the Spending Review on 20 October and will be introduced as part of the Localism Bill this autumn.

Commenting, Tim Farron said:

"I'm delighted that we are going to end the unpopular "Tenant Tax". Council tenants are invariably on low incomes, and should not be subjected to an additional tax to fund housing improvements in other parts of the country.

"Scrapping the tax will allow South Lakeland District Council to invest in the repair and maintenance of the social housing stock in their area, and to invest in building more social houses for local families