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Remembering Margaret Thatcher Matthew Warburton - 11/04/2013

Mrs_T_300Margaret Thatcher's death has dominated the media this week, with tributes, memories and assessments filling many pages. Her impact on housing is an important part of her legacy. Under her premiership housing policy took a radical new turn, setting many of the parameters which continue to dominate policy-making today. But not all of them. There are important similarities with the current government's approach and policies, but some equally important differences.

Remembering Mrs Thatcher's contribution to housing policy, the Right to Buy will spring first to most minds. It was the most popular and arguably the most important of her privatisation measures, which during the 1980s netted more receipts than all the others added together. It irreversibly changed the appearance and make-up of many council estates, and, by enabling a large proportion of working tenants to exit the tenure, helped over time to feed perceptions of council housing as a residual sector for those unable or unwilling to work.

But, in contrast with the current government's introduction of fixed-term social tenancies, the Right to Buy was enacted alongside the strengthening of tenants' rights, including security of tenure and rights of succession and to be consulted on housing management. In fact, the Housing Act 1980, in which these measures appeared, was, apart from Part I which introduced the Right to Buy, substantially the same as the previous Labour government's Housing Bill which fell when the 1979 election was called.

The 1980 Act also reformed the housing subsidy system to allow the government to withdraw subsidy to help push up council rents. But once councils lost all subsidy, as the majority did during the 1980s, the upward pressure on rents was substantially reduced. It was not until the 1990s that new legislation provided for a ring-fenced HRA and negative subsidy and the system now replaced by self-financing came into full operation.

Apart from the 1980 Act, the first two Thatcher governments left social housing largely alone. The next radical shift had to wait until the 1987 general election, following which the new government declared that councils should henceforward be enablers rather than providers of housing, shifting the responsibility for new social housebuilding to privately-financed housing associations. With the 1988 Housing Act there were also the first serious attempts to revitalise the private rented sector, though the extension of assured shorthold tenancies.

Linking all these measures was the expectation that rents should rise, with market rents becoming the norm in the private sector, and council and housing association rents moving closer to market levels. And underpinning this was the assumption that housing benefit would "take the strain" ensuing that rents should remain affordable even by the poorest tenants, even though George Young did not articulate it in precisely those words until 1990 when Mrs Thatcher had left office.

The government was quite clear that it did not want private investment - whether in private rented property or through lending to housing associations - frightened off by fears that tenants could not be relied on to pay the rent.

Times have changed. The Right to Buy was part of an aspiration to make home ownership a reality for all but the poorest. After rising throughout the 1980s and 1990s, home ownership peaked at 71% in 2003 and has been declining ever since, as house prices drift further away from average incomes. Private renting has grown, council and housing association rents have risen, as has unemployment, all of which have pushed up the cost of housing benefit.

Changing times demand changing policies, and the current government has indeed chosen to break with several elements of the Thatcher legacy, revisiting both security of tenure and radically overhauling the welfare system. Perhaps it is also time it thought again about other parts of the legacy it has stuck closer to, in particular the assumption that councils should no longer be major providers of new social housing.

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