Social Housing Bill [HL]

Lord Young of Cookham Excerpts

2nd reading
Monday 1st June 2026 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, it is always a pleasure to follow the noble Baroness, Lady Warwick. I will develop part of the argument she adduced—that there is sometimes a case for disposing of social housing.

I want to address the ongoing controversy whereby the right-to-buy policy led directly to the shortage of social housing. I voted for the 1980 Housing Act; more relevant is that I was a junior Minister under Michael Heseltine and was responsible for implementing it and then defending it. That brought me into conflict with the late Baroness Hollis—then Councillor Hollis and chairman of the housing committee in Norwich—who refused to implement the policy. I had to put in the commissioners and suspend her. We met again 30 years later, when I joined your Lordships’ House. She was emollient, if unrepentant, and we became good friends.

I understand the argument that all the receipts should have been reinvested in social housing. But suppose I had gone to Geoffrey Howe, the Chancellor at that time, and put that argument to him. He would have said, “George, that is not how it works. When we privatise Heathrow and Gatwick, we don’t build more airports. When we privatise the docks, we don’t build more docks. What happens is that the money goes into a pot, along with North Sea oil, income tax and everything else, and there is then a collective decision about how to spend it. You, George, have inherited from the outgoing Labour Government very generous provision for social housing and you’re telling me you want to keep the billions from right-to-buy receipts all to yourself, not just for this year but for every subsequent year. That would be wholly unfair to the Secretary of State for Health, who cannot sell the hospitals and add to his baseline, and to the Secretary of State for Defence, who cannot sell the nuclear deterrent”. I would have come up against the policy that dare not speak its name in the Treasury—namely, hypothecation.

Under hypothecation, all the fuel duty and vehicle excise duty would go to transport and be spent on potholes, and health would have to survive on parking charges and prescription charges. So there are very good reasons why all the capital receipts did not automatically go back to the department that generated them. I see a former Permanent Secretary at the Treasury, the noble Lord, Lord Macpherson, smiling—if not nodding.

Even if I had won that argument and all the receipts had been kept by my department, it would have made no sense in housing policy terms to allow each local authority to spend 100% of the receipts on housing. In the 1980s, all the receipts stacked up in the shire districts, where there were houses with gardens and the housing pressure was much less, and there were relatively few receipts in the inner cities, where the predominant stock was flats. The policy of requiring the local authority to reduce its debt by 80% of the receipts enabled the department to recycle the receipts. We would say to South Bucks, for example, “You’ve got to use all the receipts to reduce your debt”, and to Islington or Tower Hamlets or Southwark, “You can increase your debt by the corresponding amount in order to invest in housing”. It was a progressive policy, which annoyed a lot of Conservative councillors, but which should be supported by the other side.

Right to buy brought additional benefits in addition to being popular—so popular that no one has ever repealed it. All the evidence that I saw at the time showed that those households that exercised their right to buy looked after their property better than the cash-strapped local authority they had bought it from—they had a real incentive to do that as home owners—so the nation’s housing stock benefited. Also, the newly enfranchised residents on the estates joined forces with existing tenants’ associations, or in some cases set up new ones, to campaign for improved conditions on the estates, and everyone benefited from that.

I would also argue that there were wider social benefits in that the predominantly single-tenure estates became pepper-potted with owner-occupiers, leading to more diverse and less polarised communities. On some estates there are now third-generation owner-occupiers—a continuity that the Minister herself commended in her opening speech.

However, I have to concede that there was one consequence of the policy that we did not foresee and which has done much to discredit it. Once the properties had changed from tenancy to owner-occupation, we assumed that the owners would stay there. The whole thrust of Conservative policy was to promote owner-occupation. We did not envisage, nor did I personally want, properties then to be bought by landlords charging market rents, often underpinned by housing benefit. For the first decade or so, that was not actually an issue; it became an issue after 1996, when buy-to-let mortgages were introduced.

This is not the right time to argue whether it makes sense for the nation’s savings to be spent buying existing assets—pushing up the price—or to be invested in government stock and then in infrastructure, or in stocks and shares and then in industry, providing wealth and jobs. That imbalance is now being slowly put right by making ISAs more attractive than buy to let and encouraging institutional investment in new build.

In conclusion, what basically happened is that the right-to-buy receipts went into the pot. No homes were lost; the tenure simply changed. The pot was then spent on schools, hospitals, aircraft carriers and the rest, from which everyone benefited. The decision not to spend enough on social housing after 1980 was a collective decision by successive Governments after considering all the other demands on the public purse, as the Minister said in opening. I end where I started. The right-to-buy policy was not inevitably going to lead to the loss of social housing. The consequence of enfranchising millions of tenants has been a bonus. The lack of social housing, as I said, is a reflection on successive priorities by successive Governments.