Election 2015

Election 2015: Ed Davey alleges right-to-buy 'fraud'

Ed Davey
Image caption Ed Davey alleged: "There's a lot of fraud going on, even money laundering"

The "huge discounts" offered in right-to-buy schemes have led to fraud, Energy and Climate Change Secretary Ed Davey has claimed.

The Liberal Democrat candidate told the BBC that the schemes had seen "a lot of fraud going on, even money laundering".

The Conservatives have said they would extend the right-to-buy for tenants of housing associations.

Lib Dems would try to "dissuade" the Tories from pursuing the policy if they were in coalition again, Mr Davey said.

Margaret Thatcher's Conservative government gave tenants the right to buy their council houses in the 1980s. At the moment, council house tenants in England can buy their home at a discount of up to £103,900.

A key pledge of the Conservatives' 2015 manifesto is the extension of right-to-buy to tenants of housing associations - private, not-for-profit bodies that provide low-cost housing.

Under current rules, about 800,000 housing association tenants have a "right to acquire" their homes under smaller discounts, but the Conservatives would offer those people the same reductions as for those in local authority homes.

And they would extend the scheme to those who currently have no purchase rights at all, estimated to be about 500,000 people, claiming it could benefit 1.3 million people in total.

'Money laundering'

The Conservatives say every house purchased will be replaced "on a one-for-one basis" with more affordable homes and no-one will be forced to leave their home. Mr Cameron said the policy was a sign that "the dream of a property-owning democracy is alive".

Mr Davey, energy secretary since 2012 in the Conservative-Lib Dem coalition, told BBC One's Sunday Politics London: "One of the reasons that we would be very strongly against it is because of the fraud we're seeing.

"It's not talked about very much but, because they're giving such huge discounts, there's a lot of fraud going on - even money laundering. And I think people need to look at this right-to-buy and how it's actually operating in practice.

"It's extraordinarily worrying what we're seeing in councils up and down the country, including in London."

Image copyright PA
Image caption The Conservatives claim houses purchased would be replaced "on a one-for-one basis"

Pressed on whether the Lib Dems would "allow" the policy if they formed another coalition with the Conservatives after the 7 May election, Mr Davey said: "It would be something we would dissuade them from, because it is extraordinarily bad for social housing.

"What we want to see is a lot more houses built."

Fraud report

Mr Davey is not the first person to believe that the high profits to be made are making the right-to-buy scheme increasingly vulnerable to exploitation.

In October 2014 an Audit Commission annual report showed a 400% increase in right-to-buy fraud in London.

In 2013 the coalition government had offered council tenants in London a £100,000 cash discount, "in recognition of higher property prices in the capital".

The extension of right-to-buy would be funded, the Conservatives say, by new rules forcing councils to sell properties ranked in the most expensive third of their type in the local area, once they become vacant, with every house purchased replaced "on a one-for-one basis".

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