Why did Cameron say that Housing Associations were ‘part of the public sector’?
How could a man with a brain describe Housing Associations as part of the public sector? They are private businesses, most often, registered as charities. Yet David Cameron has described them as part of the public sector. Well, he certainly has a brain, of sorts, so why would he make this patently absurd statement? Did he not think we would notice?
The problem is that the government has got itself into a bit of a pickle. It is proposing to force Housing Associations to apply ‘right to buy’ to its homes; forcing them to sell off their homes at big discounts to the sitting tenants. How can they force private businesses to sell their homes and at a price less than their value? Imagine the furore if Labour demanded the ‘right to buy’ be applied to the private rented sector. The Tories would scream about expropriation. What about the sanctity of private property? How, they would say, could you force a private home owner (who rents out their property) to sell it? But that is exactly what they are proposing to do with Housing Associations. The only difference is they accept the need to give them some compensation.
The reason for Cameron’s comment is that the debt of Housing Associations, some £60 billion, could well become government debt. The Office of National Statistics is considering whether or not Housing Associations should be considered as part of the public sector because of the contradiction of government forcing private sector organisations to sell off some of their assets. Osborne and Cameron are making their excuses before it happens.
I guess £60 billion is not a lot compared to the more than £500 billion which Osborne has succeeded in adding to the national debt since 2010. However, the question remains as to why the public sector should be lumbered with more private sector debt. What happens if any of these organisations go belly up? Does it mean that we as tax payers have to underwrite potential failure just as we had to in the case of the banks?
The rationale for the government’s stupidity is that it is ‘unfair’ that Housing Association tenants don’t have the same rights as Council tenants. So private businesses have to be reclassified and to add insult to injury Councils will have to sell of so-called ‘high value’ homes. The receipts for these sales will be stolen by the government and handed over to Housing Associations to compensate them for some or all of their losses resulting from the discount which the government wants to force them to apply.
Housing Associations do receive some money towards the cost of new building. Yet this is no different to government money going to private businesses to encourage to come into or stay in the country, or any other form of subsidy to the private sector.
The housing policy of the coalition was bad enough but this government’s proposals will make the housing crisis even worse. The extension of ‘right to buy’ will speed up the loss of affordable ‘social rent’ homes in this country and drive more people into the private rented sector with its bloated rents and lack of security of tenure. That’s why anybody who is worried by or suffering the consequences of the housing crisis should demand that this lunatic proposal to extend ‘right to buy’ is withdrawn or voted down in Parliament.
Secretary, Swindon Tenants Campaign group
This is a letter to the Swindon Advertiser