Michael Sullivan on the Poverty Caused by the Thatcher’s Sale of Council Housing

Yesterday I put up Nye Bevan’s speech to the House of Commons during Atlee’s 1945 Labour government to show the contrast between that government’s determination to provide quality council housing for everybody, and the present situation of rising homelessness and an acute housing shortage. It was in response to an article on Mike’s blog, Vox Political, reporting that the number of evictions has doubled. In it, Mike showed how Thatcher’s dream of a home-owning democracy has finally collapsed, leaving only debt and the threat of destitution.

Michael Sullivan also describes the negative effects of Thatcher’s policy of selling off the council houses in his book, The development of the British Welfare State (Hemel Hempstead: Prentice Hall/Harvester Wheatsheaf 1996).

But there were losers as well as winners. The effect of the policy was that the best houses were the ones most likely to be purchased by their tenants and the poorest stock was most likely to be left in council ownership. As a result of the policy the condition of the council stock therefore declined. Council house sales also meant financial loss for councils. Some councils found themselves repaying 60-7ear Treasury loans on properties they no longer owned. More than this, and as a means of ensuring that the revenue from council house sales did not go back into building council houses, the government also restricted the use to which receipts could be put. The government took increasingly tight control over council housing, the fixing of rent levels in the public sector, the determination of levels of subsidy, and the use of capital receipts from council house sales. As we have seen above, council house purchasers tended to be middle aged skilled workers. Elderly people, the young, single parents and people on low incomes were excluded from the bonanza. First, it was more difficult for them to attract mortgages. Second, many of their dwellings were regarded by them as unsuitable for their long term needs. They too might be regarded as losers…

The Housing Act (1988)

If the sale of council houses appears bold and radical, then more radicalism was to come in the third term. Mrs Thatcher wanted the withdrawal of the state from housing ‘just as far and as fast as possible’ (Thatcher, 1993, p. 600). Her Housing Minister, William Waldegrave, looked forward, in 1987, to the removal of the state as a big landlord. The same principles that drove the opt-out option in relation to schools also held sway in housing. The government applied similar tools for the job as well. For the Housing Act (1988) allowed tenants to opt out of local authority housing by choosing to transfer their tenancy to any number of new, approved private landlords. Under the Act’s provision landlords would be allowed to bid for property and for the worst, run-down estates, the government introduced Housing Action Trusts (HATs) which would take over the properties and improve them before passing them over to the private sector. Though introduced by the buccaneering free-marketer, Nicholas Ridley, the policy-so radical in intent – failed to lift off the ground. It proved, said this Secretary of State for the Environment, ‘most unpopular and it didn’t achieve its objectives” (Ridley, 1991, p. 89). For reasons that seem more to do with distrust of Mrs Thatcher than with self-interest, tenants of even the most ghastly estates failed to vote for the improvement monies tied to transfer of tenancy. For the most part, they opted to stay with the local authority.

Or maybe such tenants were displaying clear, shrewd common-sense. A change of landlord could have serious consequences. First, the change would not protect rent levels because the Act abolished tenants’ entitlement to an adjudication of ‘fair rent’. Second, this deregulation also involved a loss of secure tenancy. Thus tenants who could not afford to pay an increase in rent could more easily be evicted. Furthermore, the ‘right to buy’ legislation applied to local authorities and to housing associations, but not to the private sector. The tenants of homes transferred to private landlords would lose the right to become owner occupiers. Added to these factors, housing benefit was not available for rental costs on houses which became parts of privately managed estates.

In view of the disadvantages I have just enunciated, many tenants felt that they would be ill-advised to leave council tenure for the unknown perils of the private sector landlord. It can come as no surprise to learn that many tenants’ groups fought hard to resist the privatisation of their homes. Some groups feared that the legislation would deliver them into the hands of Rachman-like landlords and such fears were not wholly without foundation or precedent. The deregulation of rents in the 1957 Rent Act had led to exploitation in rent increases and other practices which clearly contributed to the defeat of the Tory government in the 1964 general election. (pp. 220-221).

The present rise in homeless is a direct result of Thatcher’s sale of the council houses, and the same destructive policies are being carried on today by Cameron and his fellow social parasites.

Tags: 'The Development of the British Welfare State', Aneurin Bevan, Conservatives, Council Housing, David Cameron, Free Market, Homelessness, Housing, Housing Action Trusts, Margaret Thatcher, Michael Sullivan, Nicholas Ridley, Rents, Single Parents, the Eldierly, the Poor, Vox Political, William Waldegrave, Working Class