UK Government faces more problems over housing

The Conservative UK Government continues to stagger from crisis to crisis. Osborne has now got his budget through but had to drop cuts to welfare payments to do it and has a £4.5 billion gap in his finances to fill.

At the same time the Tory Party remains deeply divided and at war with itself over Europe. No wonder business managers have scheduled so many recesses between now and the European referendum. They would rather have their MPs in their constituencies than causing problems at Westminster.

Hidden by all these crises is a further drama in the House of Lords over the Government's Housing and Planning Bill. As the Independent says, moves to impose sharp increases on the rents paid by better-off council tenants are set to be thrown out by peers, with Labour predicting that the House of Lords will inflict a series of “profound defeats” on Government plans to overhaul social-housing rules:

Under the so-called “pay to stay” plans, families or individuals with a total annual income of £30,000 outside London or £40,000 in the capital will have to pay rents “at market or near-market levels”.

The proposal could leave a family earning £40,000 nearly £12,000 worse off than if they earned just below the income threshold, according to the London Tenants Federation.

Separate research suggests that 214,000 English households could be affected, including 27,000 in London, leading to accusations that the scheme could result in social cleansing in big cities. An extra £250m a year could be raised from the rent increases, with the money going to the Treasury.

This bill is slowly being eviscerated by the Lords and may be unrecognisable by the time it comes back to the Commons. How will Conservative MPs react then?