Localism Bill

Part of the debate – in a Public Bill Committee at 12:00 pm on 25 January 2011.

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David Orr: The system as presently envisaged effectively changes the new supply subsidy from a capital to a revenue subsidy. The revenue subsidy comes in the form of higher rents. It is always possible to build more homes on the back of a revenue subsidy rather than a capital subsidy. We have argued that flexibilities might allow that to happen.

Our assessment of what is likely to happen with this system, as we understand it, is that it will probably deliver new homes, but at intermediate rents. The overall stock of property available for letting at what we currently  call social rent will significantly diminish—probably by between 125,000 and 130,000. There will, in fact, be a transfer away from social rent to higher intermediate rents.