Friday, 27 June 2014

Bye-bye Right to Buy...and good riddance

Margaret Burgess MSP has secured her place in Scottish political history as the Housing Minister that ended a core element of Margaret Thatcher’s attempt to socially engineer a working class Tory vote.

In 1980 Thatcher’s Tory Government introduced the ‘Right to Buy’ for tenants of social landlords.  The Tory ‘spin’ was that Right to Buy allowed the working class to get their foot on the housing ladder by buying the home they rented from the local council.  In fact, the policy had more to do with the Tories undermining the public sector in general and the provision of social housing in particular.  A separate issue was Thatcher’s belief that if the working class owned their homes they would be more likely to vote Tory.

Of all the rightwing, free-market policies introduced by Thatcher-led Tory governments between 1979 and 1990, Right to Buy was most clearly ‘her baby’.  It was ideologically-driven and designed to restructure housing tenure within the UK.  To that extent it succeeded: today, more people own their home than rent from social or private landlords.  However, the damage to society caused by Right to Buy has been significant and will continue to impact for many years beyond the date of its final demise in Scotland in 2016. 

Right to Buy legislation forced councils to sell houses to sitting tenants who applied to purchase their home, often at a considerable discount on the market value of the property.  So, while buyers could get a very good deal, councils were often left considerably out of pocket. 

Most public sector housing in Scotland was built by councils and funded by loans secured from the Public Works Loan Board.  Such loans came at low interest rates and were repaid by councils over an extended period - often as long as 60 years - representing good value for money for the public purse.  This long-standing method of funding and providing much-needed, low-cost homes to rent in the public sector was comprehensively undermined by the introduction of Right to Buy legislation, and further by the subsequent switch to the Tory/New Labour method of funding capital projects, initially called the Private Finance Initiative and latterly Public Private Partnerships.

When Right to Buy was introduced in 1980, councils were forced to sell property at discounted prices, despite the fact local authorities would have to continue servicing the long-term loans taken out to build the houses.  In addition, under Right to Buy, councils were prevented from using receipts from the sale of houses to build replacement properties to rent.  The consequence of the Tory policy is that the public sector in Scotland has lost almost 500,000 homes that previously would have been available to rent in local communities.  This is why young couples now languish for years on council lists, waiting to be allocated an affordable home to rent.

The rise in the private rented sector is also a consequence of Right to Buy.  While people wait for public sector housing at affordable rents, they are often forced to rent from a private landlord, in a sector where charges are very much higher.  Then Tories complain about the cost of ‘welfare’, which includes Housing Benefit paid not to tenants but directly to private landlords.

As for Thatcher’s belief that home-owning members of the working class would be drawn to vote Tory, there were different outcomes in Scotland and England.  Scots, even those who took advantage of Right to Buy, continued to reject Thatcher and her party’s uncaring and divisive polices.  In England, though, many who bought their council homes did see voting Tory as part of the ‘aspirational’ journey they had been sold by Conservative spin-doctors.  That said, even in Scotland there were consequences to Right to Buy that benefitted the Tories.  Workers who had bought-in to the property-owning Tory ideology were less likely to fight for their rights in the workplace.  With a mortgage to pay, workers were loathe to take strike action, which resulted in a more cowed and subdued workforce.  This, in turn, has led to the erosion of pay levels, diminished working conditions and greatly-reduced job security.

However, last week’s Housing Bill, introduced by Margaret Burgess and passed overwhelmingly by Members of the Scottish Parliament – only the Tories voted against it – did not just end the bad legislation of Right to Buy, it also set-out progressive measures to create a housing sector designed to meet Scotland’s needs.

The new SNP Government legislation builds on measures such as a demand-led, low-cost shared equity scheme for first-time buyers, financial backing for Homes for Scotland’s mortgage indemnity scheme and a range of initiatives to protect tenants in the private sector.

Principally, though, Mrs Burgess and the Scottish Parliament – except for the Tories - last week indicated a strong commitment to investment in affordable housing: over the next four years, the SNP Scottish Government is committed to investing more than £1.35bn, with a target of providing at least 30,000 affordable homes by March 2016.

Right to Buy was an ideologically-driven attempt by London-based Tories to destroy publicly-owned housing for rent, and to socially-engineer a Tory vote within the working class.  Scotland always rejected the Tories’ twin objectives of Right to Buy, and the new housing legislation introduced last week by the Scottish Parliament finally ended the destructive policy and its consequences.

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