Prescott pledges 'social home-buy'

Prescott pledges 'social home-buy'

John Prescott yesterday put wider home ownership at the heart of Labour's election campaign with a commitment to spread assets more fairly.

But the deputy prime minister parted company with cabinet colleagues who favour an accelerated drive to sell public housing in favour of direct intervention to get more people on to the housing ladder.

With the government hoping to set up a joint fund with mortgage lenders to offer subsidised low interest loans for people on lower incomes, Mr Prescott promised more choice and opportunity to both home owners and tenants.

A "social home-buy" scheme would offer around 300,000 council and housing association tenants the chance to buy a part-share in rented homes at a discount.

Ministers decided to act after a report from the housing charity Shelter showing that Britain is being forced back to the Victorian era with an wealth gap trapping millions in poorer areas while rewarding those on the property ladder.

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At Labour's spring conference in Gateshead, Mr Prescott stressed that the government was not updating the Conservative council house sales drive led to well over one million houses being sold at cut prices.

The deputy prime minister told delegates: "We are not ex tending the right to buy. We are creating a fairer system, helping those on lower incomes and helping contribute to greater wealth distribution.

"If you own property and the price is rising as it is, you do very well. But if you only rent you add no property value."

But the drive for wider home ownership is proving a balancing act because the Housing Corporation which funds social housing fears that it could be left with a big gap in its budget if more people exercise the right to buy.

Mr Prescott has promised 10,000 extra social homes for renting to poorer families by 2007-8 on top of the 30,000 being built. This would be done by boosting the corporation's budget by £400m.

But if more people buy a part-share in their home at a discount, the corporation would be left to make up the deficit. It is assessing how much extra money it might need to make up for the discounts, the loss of revenue and housing stock. Sources say difficult choices will have to be made.

Mr Prescott was widely believed to be the victor in a battle with Alan Milburn, the party's general election supremo, over extending council house sales.

No doubt recalling past tussles, party chairman Ian McCartney told delegates the deputy prime minister was the "cement that keeps the party and the government together."

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