by GK Strategy 30th October, 2015
3 min read

Tories Accidentally Nationalise Social Housing Sector

The Conservative government was elected largely on the basis of what is fashionably called “valence politics”. This phrase is based on a model of voting behaviour that argues that people’s judgements on “overall competence” are more relevant than individual policies. For key voters in marginal seats, the theory runs, the question isn’t whether parties share their ideological positions, but which party – and which leader – is best placed to achieve commonly agreed goals.

At both the 2010 and 2015 elections, the most salient agreed goal was the need to tackle the UK’s budget deficit and secure economic growth. At both elections, the Conservatives were considered the more likely party to achieve that goal.

The past week has been a chastening reminder for senior Conservatives that the political weather can quickly change. The tax credits debacle in the House of Lords will ultimately change little in terms of the policy or its impact, but showed the government on the back foot, even allowing Jeremy Corbyn to score his first win at Prime Minister’s Questions.

Today comes further evidence that Conservative competence may be overstated. The Office for National Statistics has taken the decision to reclassify housing associations as “public corporations”, based on the extent to which the government – and particularly the Treasury – can intervene in their general corporate policy.

This has the slightly unfortunate impact of adding £60 billion to the UK’s public sector debt pile. Hardly the right look for a party supposedly committed to economic competence.

Perhaps more importantly, though, it’s a further incendiary development adding fuel to an already inflammatory negotiation between the sector and the government, sparked by the housing and planning bill, which has its second reading on Monday.

Given the importance David Cameron has personally placed on home ownership, most recently in his well-received party conference speech, this accidental nationalisation threatens to derail the relatively smooth journey his government has so far enjoyed. Whether an opposition still in disarray and engaged in prolonged navel-gazing can capitalise is, however, another matter.

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