HOUSING POLICY UNDER MRS THATCHER: New research reveals the limits to her reverence for the free market
- 31 Mar 2016
Margaret Thatcher’s deepest commitment was not to promoting the free market but to promoting her vision of free, responsible citizens. This is particularly reflected in her government’s housing policy, where alongside ‘neoliberal’ economics and a desire to cut state spending, there was a distinct moral vision of the virtues of homeownership and the dangers of mass council housing.
These are among the conclusions of research by Florence Sutcliffe-Braithwaite, to be presented at the Economic History Society’s 2016 annual conference in Cambridge. Her study examines debates within the Conservative Party between 1975 and the early 1980s about the ‘Right to Buy’ alongside debates about mortgage subsidies offered through the tax system, and the right of the homeless to housing.
Margaret Thatcher is often seen as a ‘neoliberal’ ideologue, or as a master of ‘Tory statecraft’. Examining housing policy suggests a third driver of ‘Thatcherism’ – the fervent desire to use market forces and government structures to make people behave like the ideal ‘responsible’, ‘family-centred’ citizen of Thatcher’s imagination.
Thatcher’s housing policies are often seen by those on the right as one of her great triumphs, and by the left as a great disaster. The ‘Right to Buy’ council housing was introduced in 1980 and remained one of Thatcher’s flagship policies. It led to the largest expansion of homeownership in any single decade. It also led to a great fall in the availability of social housing.
Some see the driving force behind this policy to be the creation of a new tranche of homeowners who would tend to vote Tory. Others emphasise that the key driver was the desire to shrink the state and expand the proportion of the housing sector that was subject to market forces.
This research examines debates within the Conservative Party between 1975 and the early 1980s about the ‘Right to Buy’ alongside debates about mortgage subsidies offered through the tax system, and the right of the homeless to housing, to suggest another driver that was perhaps even more important than either of these: this was a moral vision of society.
Selling council houses definitely had an electoral appeal, and privatisation helped government finances and expanded the market. But it was not only these considerations that drove homeownership policy. While the free market was praised by Thatcherites, in relation to boosting homeownership, it was certainly not to be allowed free rein.
This becomes clear when examining how debates over the subsidisation of mortgage-payers were tied in with debates about selling off council housing. Both these things heavily distorted the market. And some free-market economists – such as John Jewkes, once President of the Mont Pélérin Society – argued forcefully in private correspondence with Thatcher against such policies.
Yet Thatcher was unmoved by such arguments. This highlights definite limits to her reverence for the free market. While Thatcher was ardently opposed to a blanket subsidy on council house rents, she supported such a subsidy for mortgage-payers, because her deepest commitment was to the promotion of her vision of free, responsible citizens, not promotion of the free market.
This, ultimately, was what she thought homeownership encouraged, as she said in a 1979 election rally: ‘we’ve got the policy to try to get more and more people to become property owners…if they’ve got something of their own, they have a degree of independence and they have a stake in Britain’.
In 1977, the Conservative Party had another issue to contend with: whether to try to kill a bill giving all homeless families and vulnerable groups a right to a home. Though they weakened it, they did not try to kill it. Why was this so, given that Thatcher emphasised that people should not look to the state to enforce ‘rights’ like the ‘right to housing’?
There was a pragmatic reason for leaving the Act untouched: homelessness was an increasingly high-profile issue in the 1980s. But it was also true that the residualisation of council housing, which was an unintentional side effect of the Act, fitted into Thatcher’s overall vision of housing.
Again, alongside ‘neoliberal’ economics and a desire to cut state spending, a particular moral vision of the virtues of homeownership and the dangers of mass council housing shaped Thatcherite approaches to housing.
Thatcherism, housing policy and homelessness