Tories: Give council house tenants a 10 per cent share

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Council and housing association tenants should be given a 10 per cent "share" in their homes which they could cash in when they move out, the Tories will propose today.

The money would be handed to tenants who had a five-year record of good behaviour and who leave to buy their own home. It would give them a deposit towards their own property.

The idea, which builds on Margaret Thatcher's right-to-buy scheme for council tenants, will be recommended by a policy review group on public services set up by David Cameron.

Its report says: "Increased mobility within social housing can help more people onto the housing ladder; can help to create mixed-tenure neighbourhoods; and can help to free up social housing stock to meet demand and to address some of the overcrowding that exists."

The group, co-chaired by the former health secretary Stephen Dorrell, says: "Some housing estates have become epicentres of poverty and crime, fuelling poor public health, truancy and educational failure as well as mental illness. Housing ought to be central to all improvements in wellbeing for the individual and for society. Where you live can indicate how long you will live."

It says that social tenants in "dead-end ghettoes" are trapped in "a vicious cycle of deprivation and corresponding poor educational attainment and ill health."

Yesterday, the Tories promised they would "not spend a penny less than Labour" on public services after announcing they would match Labour's spending plans for the next four years.

George Osborne, the shadow Chancellor, said the move would create "headroom" for lower taxes because the economy is expected to grow faster than public spending.