The biggest privatisation of the 1980s
Right-to-buy was originally a Labour policy, but it was adopted – initially reluctantly – by Margaret Thatcher. It was the biggest privatisation of the era by far, worth around £40bn in its first 25 years. It gave millions of families a large asset for the first time, at discounts of up to 50%, and was an electoral masterstroke. “No single piece of legislation has enabled the transfer of so much capital wealth from the state to the people,” said Michael Heseltine, the minister responsible – whose stated wish was to reverse the “dominance of the state over the life of the individual”. However, the policy also sucked a large part of the UK’S postwar investment in housing out of the public sector forever. Councils were given only half the proceeds, and had to use the money to pay debts before they could build replacement housing. Public finances have lost out twice over, since many of those who would have had public housing are now housed in expensive private rental properties at the state’s expense, via housing benefit – the second-largest single item of public spending after pensions.