‘Cancel the rent’ policy would be “un-Labour”, says Debbonaire

A ‘cancel the rent’ policy would be “un-Labour” and “really regressive”, Shadow Housing Secretary Thangam Debbonaire has said in response to criticism of her party’s position on rent arrears.

During an event on Thursday, Debbonaire was asked about the backlash that followed Labour’s announcement last weekend when the party said it would give renters two years to pay back coronavirus-related arrears.

Labour set out a five-point plan, which included extending the Covid-19 ban on evictions, outlawing evictions due to coronavirus-related arrears, improving Universal Credit and temporarily increasing Local Housing Allowance.

But the plan also said Labour would “grant renters at least two years to pay back any arrears accrued during this period”, which proved controversial among some party activists and backbench MPs.

An open letter calling on Keir Starmer to “cancel the rent” was signed by over 4,000 members within 48 hours and backed by soft left group Open Labour as well as Momentum.

It accused Labour of “failing renters”, and said its proposed “solutions simply are not good enough”. Momentum said “Labour’s new policy would see renters shoulder the cost of the crisis”.

Asked for a response to such critics, Debbonaire told the Young Fabians online event on Thursday evening: “The policy called ‘cancel the rent’ is surprisingly un-Labour. It’s a really regressive policy.

“Because, for instance, there are people who are still in work, still able to pay their rent. And if you just cancelled rent, they would also benefit and they don’t need to.

“I have a flat in London, which all MPs who don’t live in London [have] – it would cancel my rent. That would be completely unnecessary, really regressive, and not targeted at the people who need it the most.

“Whether we like it or not, whether we think it’s either moral or not, there is a legal structure underneath this. Which is a tenant has signed a contract with a landlord.

“Even if it’s a rubbish contract, with a rubbish landlord who is charging far too much, it’s still legally binding. And just cancelling it has consequences. In fact, there isn’t such a thing as cancelling it.”

The new Shadow Housing Secretary added: “Let’s say you did decide that there would be a general waiver. Nobody needed to pay rent. Everyone was exempt until the end of the crisis.

“The landlords, whether we like it or not, would have a legal case against either the government or their tenants or quite possibly both… So you have to think about who are you going to target it on and how would you compensate landlords for that.

“And if you take the entire private rented sector and you cancelled its rent, we’re talking about £7.2bn a month… So we’re talking about an enormous amount of money.

“As a Labour politician, I can’t call for the government to do something unless I genuinely believe that it’s a policy we would take if we were in government. And I’m not sure that we would.

“Because at the moment we actually don’t know what’s ahead of us… I would rather give the money upfront so they weren’t in arrears.”

On social housing, Debbonaire said: “If you also cancelled the rent and you didn’t compensate the landlords, social landlords – like councils and housing associations – some of them would go bust.”

She argued: “At the moment, most social landlords are in any case coming to really good and generous arrangements with tenants who are getting into difficulties. It’s the private rented sector where we’ve got a problem.”

The Labour MP stressed that her preference would be to “deal with it upfront” by removing the benefit cap and increasing Local Housing Allowance – moves included in Labour’s five-point plan.

On the ‘cancel the rent’ proposal, she continued: “If we had that policy and a lot of private landlords went bust, I know there are lots of people including lots of Labour members who’d go ‘yippee, that’s fine, they’re evil, exploitative people’.

“Which may well be true. But if they go bust, their tenants would be homeless. We have to think about what would happen after that. The housing that they own would probably be bought up by even greedier landlords.”

Debbonaire added: “We also have to think about that sometimes people who’ve been on low pay… are topping up a very medium, mediocre income with rent on a property that used to belong to their mother who has maybe moved in with them and they’re renting out their mum’s house.

“And that is actually topping up their income. Now, you might say that’s wrong, you might say that’s not OK, but we do have to think about those consequences as well.”

She concluded: “It would be deeply regressive to have a general rent waiver. And to come up with a specific rent waiver, if you’re gonna do that and target, you might as well pay upfront by removing the benefit cap and increased Local Housing Allowance.”