The senior Labour figure said the measure would relieve pressure on families amid soaring energy bills, rent rises and last week’s contentious cut to universal credit payments for some of the lowest paid in Britain.
His intervention comes as the chancellor Mr Sunak prepares to deliver the autumn Budget and spending review on 27 October, after failing to rule out further tax hikes at the Conservative Party conference.
Mr McDonnell, a key figure during Jeremy Corbyn’s leadership of the party, said a year-long freeze must apply to all tenants, including those with private landlords and housing associations or councils.
An analysis earlier this week revealed the proportion of private renters in England in arrears had doubled during the Covid pandemic to around 780,000, with seven per cent behind on payments between April and May 2021.
Separate figures released by the government also showed that around 191,000 renters in receipt of universal credit were two or more months behind on rent payments between April and May 2021.
“Many families are facing a winter of worry and hardship from the cut in universal credit, hikes in energy prices and record rent rises,” Mr McDonnell said.
“It’s really tough and uncertain time for so many. A rent freeze will relieve many of them of major pressure on their household budgets this Christmas and provide increased security that they can afford to keep a decent roof over their heads.
“It will also assist the economic recovery from Covid by maintaining demand in our economy.”
Pointing to research from the HomeLet Rental Index in September showing that the average rent in the UK is now at a record high of £1,061 – up 7.5 per cent on the same time the previous year – Mr McDonnell’s office said a rent freeze could save all households between £1.2bn and £4.5bn.
They added that in Liverpool, for example, over 120,000 private renters pay around £1.2bn a year in rent, with a rent freeze across the city region generating savings between £24m and £95m.
During the autumn of 2020, Sadiq Khan, the mayor of London, urged the communities secretary to give him the powers to freeze private rents in the capital, warning of a “tsunami of evictions” when the government’s moratorium on evictions ended.
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