CLEETHORPES MP Martin Vickers has dismissed calls for a rent cap to be introduced in a bid to control the spiralling cost of housing benefit.
Newly released figures show that payments of the benefit in North East Lincolnshire have increased by 56 per cent over the past six years – from £37.46 million in 2006/07 to £58.44 million in 2012/13.
Meanwhile the number of housing benefit claimants has gone up by 23 per cent, from 12,582 to 15,416 over the same period. The total bill for private rented tenants has risen by 64 per cent – from £18.1 million to £29.67 million.
Across the Yorkshire and Humber region, the housing benefits bill has mushroomed by 352 per cent over the past decade – from £299 million in 2003/04 to £1.35 billion in 2012/13.
And the man who carried out the research, Labour leader of York City Council James Alexander, believes a cap on rent should be imposed in a bid to prevent the housing benefit bill spiralling even further out of control.
Councillor Alexander says that such a move would save around £4 billion a year, reduce the housing benefit bill by 20 per cent over the course of the next Parliament and enable the Government to use £20bn on building new homes.
He said: "This move would significantly reduce the nation's benefit bill, increase the number of affordable homes available and motor the economic recovery.
"Housing benefit has become a landlord benefit and it makes no sense for privately renting tenants to pay ever increasing proportions of their wages from work on the cost of housing while their taxes are being used to subsidise their landlords mortgages."
The idea has received support from several of the political groups in North East Lincolnshire.
However, Mr Vickers said a rent cap would only result in restricting the supply of housing for those who needed it the most.
"Rent controls were abolished in the 1980 Housing Act to encourage the supply of more housing which has to a considerable extent been achieved," he said.
"We have had 13 years of a Labour government and they came to exactly the same conclusions as the Conservative government that came before it. What he is suggesting is turning the clock back almost 40 years.
"I accept that there is a need to look at the cost of housing benefits and both this government and the previous government have taken measures to try to limit the cost to the tax payer.
"But once you interfere with the housing market it becomes distorted. If you introduce a rent cap it will restrict supply and the price of what is available will increase."
Mr Vickers added that the government had made it easier for local authorities to grant permission for more sustainable developments, but stressed the emphasis was on the word "sustainable" and that this relied on council's having an up to date Local Plan – something that North East Lincolnshire does not have.
Councillor Ron Shepherd, the leader of the Ukip group in North East Lincolnshire, said: "We agree in principle with the proposal. The only reservation that we have is that with less income landlords might tend to scrimp and save on repairs and maintenance.
"But we agreed in principle that council tax payers cannot keep supporting private landlords."
Councillor Andrew De Freitas, leader of the Liberal Democrat group, said: "It's an interesting idea and one that ought to be looked at. I am not sure what argument there could be against it. We used to have a regime where you had a 'Fair Rent' but now it is very much a free-for-all. I don't agree with Mr Vickers. I have much more sympathy with the argument raised by Mr Alexander."
Councillor Chris Shaw, Labour leader of North East Lincolnshire Council, said he also supported the York Council leader's proposal.
He said that while the housing benefits bill had increased in the borough, the grant provided by government to meet it had not – meaning the burden fell on the authority to find the cash from elsewhere.
"It is costing the rate payers more and it is not benefiting the residents. The burden falls on the local council tax payer because the government hasn't sorted out the benefits regime."
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