Isabel Hardman

The ‘genius’ plan that stopped a Tory housing rebellion - and endangered a manifesto pledge

The 'genius' plan that stopped a Tory housing rebellion - and endangered a manifesto pledge
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The Housing and Planning Bill gets its second reading in the House of Commons this afternoon, and though Labour has been making angry noises about it, it won’t encounter as many problems as it might have done. This might ultimately be a bad thing for the Tories, though.

The rebellion that won’t happen would have been on the right-to-buy for housing associations, which the Tories put in their manifesto, but which a number of their own MPs were deeply worried about. Housing associations were so worried about the impact of the government legislating to force them to sell off their homes that they made a voluntary offer to ministers to design their own scheme so that the government didn’t need to legislate.

The National Housing Federation, which represents housing associations predicated their offer on two main threats: the first being that if the government did legislate, it might tip the balance in the debate about whether these organisations are public bodies. The second was that it was in the Tory manifesto and so there was nothing these landlords could do to stop it happening.

As I have written in an earlier post, I understand that there were enough Tory MPs worried about the impact of right to buy on housing stock in their area to make it impossible for the Tories to legislate. I now understand that this group of would-be rebels was around 30-strong, and that the Whips’ Office was well aware of this. There were also ministers who were making complaints behind the scenes about the policy. Those involved in getting legislation through the House have since called Communities Secretary Greg Clark a ‘genius’ for securing the voluntary deal, as it means the Tories could avoid a row and legislative defeat. These names were not being circulated publicly, so the sector will not have known about them, but those ministers involved in working on the voluntary deal will have been well aware.

There are still provisions in the Bill which relate to the right-to-buy, as far as the sell-off of expensive council properties to fund it is concerned. But Tories don't see this - and a space in the legislation for further policies to be added - as the problem.

The first threat about housing associations being classed as public bodies has happened anyway, regardless of the voluntary deal. The Office for National Statistics announced on Friday that most of these organisations would now be considered part of the public sector. The government insists that it will have little material impact (though it does add £60bn to the public debt).

But the problem for the housing associations now is whether the basis for their voluntary deal was incorrect: they tried to avoid legislation in order to avoid being reclassified, but have since been reclassified anyway, and they tried to avoid legislation because they thought it was an inevitability, when internal Tory intelligence suggests that it wasn’t.

For Greg Clark, though, right-to-buy is just one of his worries. The Bill being debated today is part of Tory efforts to increase the supply of new homes. Driving up house building is one of two targets Clark must meet in order to keep his job. The other is to reverse the decline in home ownership, and right-to-buy will only make a modest contribution to that, if housing associations live up to their pledges in the voluntary deal. If they don't, then the Tories may find in a few years' time that their flagship manifesto pledge amounts only to a miserly number of homes being sold off.