Social justice and prudent economics CAN be bedfellows

Last Sunday marked the 30th anniversary of Margaret Thatcher's election. Three whole decades! I was a 10 year-old schoolboy when she came to power, and recall standing outside my primary school on election day, helping local party workers count in the vote. I was a Tory boy, back then, long before my student dalliance with the left.

Round our way, an estate of mixed private and social housing, it was Mrs T's commitment to allow council house tenants to buy their homes that won it. Back then, to live in local authority housing was to lack geographical and social mobility and to be on the receiving end of a litany of petty rules and an all too often uncaring housing department, whose apathy could easily result in avoidable deterioration in living conditions. Until Margaret's historic victory, to a large degree the class a person was born into determined where and how they would live their entire lives; from this flowed everything from their work opportunities to the standard of their children's education to their life expectancy.

Margaret Thatcher set the working class free, and it was grateful. Britain became a better place as a result, with greater social and labour mobility. But there was a price: the best social housing moved into the private sector, and it was some years before it was replaced. And when this happened, it was through the mechanic of housing associations. Based on the model of philanthropic landlords such as the Guinness and Peabody Trusts of the Victorian era, they were intended to allocate and managing housing on more of a grass roots, community-centred basis than big, monolithic municipal authorities.

Trouble is, as often happened when New Labour became involved, political correctness, 'the diversity agenda', nepotism and good old-fashioned corruption weren't far behind. Recent years have seen the emergence of a great many instances of injustice in the allocation of housing association tenancies, some of which have caused inter-community tensions, especially along racial lines. For instance, many HAs prioritise what they see as disadvantaged groups - members of a particular religion, refugees, resettled offenders or drug users. And those with no nearby friends or relatives who could offer them a spare bed also jump up the queue. As a result, there are many areas in London alone where an indigenous family in acute housing need has no realistic prospect of winning a housing association tenancy - I use the word 'winning' intentionally - within a decade. Ironically, by the time they near the front of the queue, chances are the children will be leaving home, for which points are deducted and places lost.

With a plethora of HAs established by and for special interest groups, the risk is that those who don't identify with an obvious minority aren't catered for: apparently Greater London has more than 80 black housing groups. Can you imagine the furore there would be if someone dared start one catering solely to white people?

As well as fostering resentments, the arbitrariness with which social housing is allocated is hugely wasteful of taxpayers' funds. While social mobility has, in some regards, thankfully improved since 1979, those doling out subsidised social housing tenancies still work on the assumption that a person's circumstances on the day on which that tenancy is granted determine their needs for the rest of their life. This not only risks tying up a very expensive community-funded asset for two generations or more but it also means the occupiers of that property are freed from the same economic pressures that drive the rest of us to work hard, not only supporting ourselves but also paying taxes that provide the social infrastructure we all enjoy - and also subsidising the lifestyles of those unable, or, increasingly, unwilling, to support themselves.

What prompts me to remark on this? Only this story, revealing that a Labour peer accused of fiddling her expenses by claiming a second home allowance on her London home based on the pretence that an empty flat in Maidstone is actually her principal residence is actually the lucky beneficiary of a housing association tenancy on her London property. Turns out that the smart three-storey townhouse in Wapping that is absolutely, definitively (her lawyers insist) not her main home, and which she therefore claims £174 a night tax-free to stay in when in town on Parliamentary business, is actually a Housing Association property rented for a reported £104 a week - a sixth of the market figure.

Today, Baroness Uddin is not only a peer but also enjoys a string of well-remunerated public sector non-executive directorships and drives a BMW X5. It's reasonable to assume she could accommodate herself at market rates in London, especially if she really does live mainly in Maidstone and therefore can legitimately claim an accomodation allowance for when she's in the capital. There's no suggestion that she misrepresented her circumstances when she was awarded the tenancy by Spitalfields Housing Association, but the fact that such a dramatic change in her fortunes does not result in her having to either move out or pay a fair rent surely points to an injustice: her comfortable lifestyle is being subsidised by taxpayers who are far less advantaged than her and her family, and she's blocking the allocation of a social asset to someone in real need.

I headlined this blog 'Social justice and prudent economics can be bedfellows' because one of the unwritten axioms of New Labour is that fairness costs money. They'd like voters to think that voting for a Conservative Party that promises to get public spending under control means stepping back into the days of workhouses and rickets. In fact, I believe that the opposite is the case. The best way to eliminate poverty is to create the circumstances under which every person does everything in their power to support themselves and their families and to make their fair contribution into the tax pot. Society is then much better placed to ensure a dignified life to those who genuinely can't - and, just as important - to provide them with the helping hand needed to get back on their feet. We need to reform the entire tax, benefits and social housing system. This should be driven by the need to promote social justice and end perverse incentives, but the outcome will also be to save shedloads of money.

In the past I've written about the imperative to reduce the number of people employed, directly and indirectly, by the State. I should stress that this isn't about having fewer doctors, nurses, police officers and others who deliver genuine services to the public but, rather, that the number administrators, managers and quangocrats has spiralled out of control and now needs to be slashed.

A good example of this is in social housing. The Housing Corporation, which dispenses taxpayers' largesse to housing associations, the managements of the HAs and the local authorities they work 'in partnership with' (why does it always say that on the signs?) could all be dispensed with if we instead phased out lifelong social housing tenancies in favour of extending and reforming housing benefit and promoting the more widespread investment by individuals and institutions in private-sector rental property. The Left will no doubt argue that this will simply create more work, and hence jobs, in local authorities' housing benefit offices. But actually, 80 percent of HA tenants already receive housing benefit, and I believe the outcome of the proposed changes would be to push most, if not all, of the remaining 20 percent into owner occupation, so the savings would be real.

If there's one thing that drove us out of power in 1997, other than the economic downturn in the first half of the 1990s, it's the gnawing feeling that Mrs Thatcher went too far for much of the public in some areas. Few Conservatives today would endorse her infamous quote that 'There's no such thing as society, only individuals and families'. Tony Blair was swept into number 10 on the back of a feeling that, at a time of increasing affluence, voters wanted a more caring administration, not necessarily for themselves - they were, in the main, doing just fine - but, paradoxically, because they felt they could afford to be a little more generous to the mythical 'others' who weren't so well off.

This is unlikely to be a factor in the run-up to a recession election in Spring 2010. But the factor that will determine whether we're confined to a single term, to undo the economic damage and profligacy of the Brown era, or instead succeed in reasserting ourselves as the natural party of government, is whether we succeed in promoting fairness and social cohesiveness and reducing genuine poverty and suffering, not only as a sop once we've fixed the economy, but as an intrinsic part of the necessary cost reduction programme.