'Tax on Norwich Tenants' Slammed

7.24.00pm BST (GMT +0100) Tue 15th Jul 2008

Figures newly obtained by the Liberal Democrats show that the Government is planning to keep nearly £200m of council tenants' rent this year - of which nearly £6m will be taken from Norwich City Council tenants.

Every year, the Treasury decides how much local authorities need to spend on new homes and maintaining council houses. Those, such as Norwich City Council, that it deems to take more in rent than they need to spend pay a 'negative subsidy' to the Treasury, which is then redistributed in part to authorities deemed to have a greater need.

However, this year the Treasury is collecting £195,816,938 more than it is redistributing. This extra money will remain with the exchequer and will not be spent on council housing.

Liberal Democrat Parliamentary Candidate for Norwich South, Simon Wright, said: "I'm appalled by these figures. Effectively, tenants in Norwich are paying a £6million stealth tax to the treasury and seeing nothing in return."

"Norwich residents are already struggling to keep up with the rocketing prices of petrol, food and other household bills. The treasury is taking yet more money from people who are finding it difficult to pay the regular bills, and the money is leaving Norwich altogether.

"There are also thousands of other people in need of social housing in the area and who are not seeing any benefit from this unfair tax on tenants. Money paid by local tenants should be kept in the Norwich area and spent on improving homes and building more council houses."

"Rents should be ring-fenced and kept locally, not swallowed up by the treasury."