Following its introduction in 1980, the Right to Buy scheme quickly proved to be arguably the most popular Conservative policy in recent history and is widely hailed as one of Margaret Thatcher’s most significant achievements.

Right to Buy allowed council tenants to buy their council house at significant discounts, ranging from 33% to 50% dependant on a tenant’s length of tenure and rent paid. Over 500,000 council houses were sold under the scheme prior to the 1983 election, and over 2 million homes have been bought under the scheme in total.

It is no surprise the scheme was popular. It allowed people who would have been otherwise unable to secure a first foot on the housing ladder. Not only that, once the discount’s clawback period had elapsed, the new owners were able to sell up for a substantial taxpayer-gifted profit.

The result was a whole new generation of Conservative voters, many with great personal loyalty to Mrs Thatcher. “Maggie got me my home” was a cry to be heard up and down the country, often from people who had never before voted – or even considered voting – Conservative.

It is equally no surprise that a struggling Conservative Prime Minister would seek to reincarnate his predecessor’s most successful policy.

But the policy now, as it did in the 1980s and 90s, comes with a serious downside.

Not only did Right to Buy preside over the loss of 2 million much need council houses which were never replaced, the legislation helped ensure they wouldn’t be replaced. Although half the proceeds of each sale were handed over to local authorities, those authorities were expressly forbidden from using the money to build new social housing.

While the best council properties were quickly snapped up by tenants who recognised a bargain when they saw one, local authorities were left with a rump of the poorest quality housing and ever dwindling sales.

In attempting to breathe new life into the policy in April 2012, David Cameron claimed to have addressed these problems.

By trebling the discount cap to £75,000 for most of the country, and quadrupling it to £100,000 in London, and increasing it to a maximum 60% of a property’s value, even the poorest quality housing became more attractive to potential buyers. Well if you could afford to secure the necessary mortgage and were prepared to remain in the property until the clawback period had expired, why would you look a £75,000 gift horse in the mouth?

In addition, the Prime Minister made a commitment to using all of the new sale proceeds on building new affordable homes.

Too good to be true, surely? Well, yes, it is.

The figures show that between April 2012 and July 2013 some 10,547 social houses were sold under the beefed-up Right to Buy scheme. These sales generated £173 million in receipts which would then be passed to councils and housing associations to build replacement social housing.

And therein lies the problem. Each sale generated just £16,400 on average with which councils and housing associations could use to build a replacement. Whilst I suppose it is possible to build a new council house for such a paltry sum, I would have thought the tale of the Three Little Pigs combined with the high winds which have buffeted the country in receipt weeks would deter even the most deluded local authorities from replacing the sold stock with homes built from sticks and straw.

Nevertheless, Conservatives were undeterred. Housing Minister, Kris Hopkins, proudly declared the UK would “soon have the fastest rate of affordable house-building for two decades”. Never mind the fact he could equally, and as accurately, have pointed out that this government had brought about the greatest net loss of social housing since the Conservatives were last in office.

Not only that, the situation is to deteriorate further with Friday’s announcement that the maximum discount available under Right to Buy is to increase from 60% to 70% of a property’s market value.

The economic argument for using the receipts from the sale of social housing to build replacements never made any economic sense. Indeed, in 1979 Nigel Lawson, then Financial Secretary to the Treasury, was quick to warn “It will make no sort of economic sense if stock sold at a discount is replaced by new building.”. That advice remains true to this day, more so in fact given today’s much more generous discounts.

In a bid to revive the fortunes of his party, which can at best be described as stagnant, David Cameron is taking us back to the future in the absence of any fresh ideas or thinking. Like Mrs Thatcher, he is trying to buy a whole new generation of Conservative voters with their own homes, but without having addressed the fundamental and serious problems which the policy creates.

It is nothing new for Prime Ministers to run out of steam and ideas towards the fag end of their administrations, but to do so after just three and a half years into the job must surely be a record.

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