10 January 2003
In the letter, addressed to Prime Minister Tony Blair, Prescott outlines a three-stage modernisation of the right-to buy scheme, which allows council tenants to purchase their homes at a discount. He was expected to give the full details this week but the announcement has been postponed.
However, legislation is expected this month to cut the maximum discounts in London from £38,000 to £16,000, in an attempt to stem the use of RTB in the capital.
In the letter, Prescott also proposes equivalent reductions in other areas experiencing 'pressures on housing stock', such as Yorkshire, the Northwest, the Southeast and the Eastern Regions.
He goes on to reassure Blair that he has 'enough evidence' to justify the cuts in discounts should tenants in these areas launch legal action.
Stage two, also expected this year, will be 'simple but effective' changes to RTB rules that have widely been expected. These include extending the initial qualification period for tenants from two to five years, and increasing the time limit on reselling (and discounts being repaid) from three to five years.
Prescott clearly acknowledges the controversy of his proposals in the letter. 'I will be publishing a draft Housing Bill by March, but I am wary of seeking to expose in that consultation the simpler primary legislation. Instead, I am attracted to adding the clauses to the Bill on introduction, we hope in July,' he writes.
His final changes, which are not timetabled, include moving key rules such as qualifications and exemptions out of primary legislation, allowing him the power to change the scheme with simple orders. He also proposes banning the letting of RTB properties for five years to quash the buy-to-let market and making discounts repayable for up to five years for tenants who fail to live in their properties.
The Chartered Institute of Housing said the leaked plans were broadly what it expected.
'We would be very pleased to see the government acting in this way. In the longer term the government must seek to establish a policy that helps to improve the image of housing by rewarding responsible tenants,' said Merron Simpson, policy officer at the CIH.
PFjan2003
