Housing Policy of Conservative Government: 1979 to 1997

What aspects of the housing policies of conservative Governments between 1979 and 1997 reflect the key policy principles of public choice theory?

The following will discuss the aspects of the Conservatives housing policies between 1979 and 1997 that reflected the key policy principles of public choice theory. When the Conservatives came to power they were committed to reducing the size and the role of the public sector which had consequences for the housing policies they pursued in office. Reducing the quantity of public sector housing, as will be examined, fitted in with the principles of public choice theory.

The principles of public choice theory are mainly based upon the idea that the public should be free to make choices about the services that are available to them. Services such as education, healthcare provision, and specifically here regarding housing policies (Dorey, 2005 chapter 6). Britain had a large public housing sector of council houses that were rented to people at lower rent levels than paid to private landlords. Council tenants had little choice in the location, quality, and costs of council housing (Parsons, 1995 pp. 306 – 326). Council housing had not been built to fit in with the principles of public choice theory, it was solely intended to provide affordable housing for those people that could not afford to buy their own homes, or afford private sector rents (Parsons, 1995). Housing policies are not usually designed for the benefit of those that analyse public policy (John, 1998 p. 9). Before 1979 central government set quotas for how much public housing could be built, whilst councils allocated houses in order of the most needy first. The destruction of housing during the Second World War meant that high levels of council house construction had been necessary (Sandbrook, 2005 p. 179). Margaret Thatcher wished to increase people’s choices and opportunities to own their own homes. This was partly to increase levels of home ownership and partly to reduce the role of government in people’s lives (Fisher, Denver & Benyon, 2003, p.15). The selling off of council housing certainly was a key aspect of the Conservatives housing policies that reflected the principles of public choice theory. That it did so was due to coincidence rather than design. The main motivations behind the selling off of council housing were political, economical, and ideological. The Conservatives believed that it allowed more people to own their own homes and would increase their electoral support. Homeowners were more likely to vote Conservative than council house tenants who had traditionally been strong Labour supporters (Coxall, Robins & Leach, 2003, p.28). Economically and ideologically selling off council housing fitted in with the aim of reducing the public sector. It also proved to be one of the most popular Conservative policies between 1979 and 1997, more than a million families bought their council houses (Moran, 2005, p. 18).

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For the Conservatives under Thatcher’s leadership, housing policies were part of their plans to change the economy and society away from the post-war consensus of Keynesian economics and a welfare state in which people had no influence over the way services were provided (Eatwell & Wright, 2003 p.147). The popularity and take up rates for the right to buy council housing was a de facto privatisation of large parts of the public housing sector. Its impact on the British economy was similar to the privatisation of the public utilities, the reduction of trade union power, and the adoption of monetarist policies (Dorey, 2005 chapter 6). The Conservatives were aware that not every council house tenant was either willing or able to buy their homes from their respective local authorities. Therefore the Conservatives decided to further reduce the level of public housing controlled by councils by transferring whole housing estates to non-profit organisations such as housing associations dubbed ‘Registered Social Landlords (RSLs)’. Tenants were given the right to choose between local authorities and RSLs controlling the management of their housing estates. The right to opt out or stay under local authority control nominally gave tenants a greater freedom to live their lives. Taken at face value this was another aspect of Conservative policy that followed the principles of public choice theory (Coxall, Robins, & Leach, 2003 p. 28). It was also another example of the Conservatives trying to reduce the powers of local authorities (Parsons, 1995 pp. 306 – 326).

Under the Conservatives the number of houses being built for the public sector dropped dramatically as local authorities were not allowed to use the money from council house sales to fund new construction (Parsons, 1995 pp. 306 -326). Instead new house construction was mainly undertaken by private sector building firms. The public had more choice about where they lived and the size of their homes, if they could afford to buy their homes. The more limited number of homes built for the public sector was constructed for RSLs and housing associations. Removing the management of public housing from the control of local authorities was intended to make social housing provision more cost effective and more responsive to the needs and wishes of their remaining tenants (Stoker, 1999 p. 53). The Conservative governments were also hopeful that the transfer of public housing would save money, as RSLs would seek to fund improvements and new construction through partnerships with private sector businesses. Since 1997, New Labour has not substantially altered housing policies as a means to limit expenditure as much as reflecting a wish to continue with policies influenced by the principles of public choice theory (Seldon & Kavanagh, 2005 pp. 70 – 71).

Therefore, aspects of the housing policies of the Conservative governments between 1979 and 1997 reflected the key principles of public choice theory from 1979 the Conservatives were intent on reducing the level of people that lived in council housing through the right to buy scheme. That scheme allowed existing tenants to purchase their homes at discounted prices. Right to buy fitted in with Margaret Thatcher’s political, economic and ideological beliefs that the public sector should be reduced to allow people to make their own decisions and become homeowners. Thatcher rightly assumed that council tenants that bought their own homes would be more likely to vote Conservative. Not only did selling off council housing reflect the principles of public theory, it had the political advantage of being electorally popular. For people that could not afford to buy their council houses the Conservatives introduced the possibility of whole estates opting out of local authority control managed by RSLs. The Conservatives managed to achieve their aim of increasing home ownership in Britain as over a million council houses were bought by their tenants.

Bibliography

Coxall B, Robins L & Leach R (2003) Contemporary British Politics 4th edition, Palgrave, London

Dorey P (2005) Developments in British Public Policy, Sage Publications, London

Eatwell & Wright (2003) Contemporary Political Ideologies 2^nd Edition, Continuum, London

Fisher J, Denver D, & Benyon J, (2003) Central Debates in British Politics, Longman, London

John P, (1998) Analysing Public Policy, Pinter, London

Moran M, (2005) Politic and Governance in the UK, Palgrave, Basingstoke

Parsons W, (1995) Public Policy, Edward Elgar, Aldershot

Sandbrook D, (2005) Never had it so good – A History of Britain from Suez to the Beatles, Abacus, London

Seldon A & Kavanagh D, (2005) The Blair Effect 2001 – 5, Cambridge University Press, Cambridge

Stoker G, (1999) The New Management of British Local Governance, MacMillan Press Ltd, London