The government’s plans to extend the right to buy to housing association tenants "distorts the charitable objectives of housing associations", according to the Labour peer Baroness Hollis of Heigham.
Speaking in a debate in the House of Lords yesterday, Hollis told peers that housing associations "have come from the charitable sector to build social housing for those unable either to rent or to buy".
She said: "As a result, this policy is morally wrong, it distorts the charitable objectives of housing associations and it is financially illiterate."
Hollis, who in June said the proposals undermined charity legislation dating back to the time of Elizabeth I, said yesterday that the measure would result in housing associations and local authorities losing homes to rent and the taxpayer funding a "gift of up to £100,000" in the form of the discount given to the tenant on the purchase of the home, which she warned might end up being privately rented out by the buyer.
In response, Baroness Williams of Trafford, parliamentary under-secretary of state in the Department for Communities and Local Government, said she could confirm that "houses that have a specific charitable purpose will retain it", although she did not enlarge on what that would mean in practice.
"I also confirm that the government makes no bones about the fact that they support people’s aspiration to own their own home," she said. "Contrary to what the noble baroness thinks, the building of extra homes on at least a one-for-one basis by housing associations will add significantly to the housing stock in this country."
David Cameron, the Prime Minister, announced last week that the government had secured an agreement with the National Housing Federation, the umbrella body for housing associations, on implementing the extension of right to buy.
The move would mean tenants would be able to buy their homes at a discount, with the government making up the difference.
Williams began the debate by repeating a statement that had earlier been read in the House of Commons by Greg Clark, the communities secretary, about the right-to-buy plans and the agreement with the NHF.
The statement said that the measure would enable 1.3 million families the opportunity to buy homes at right-to-buy discounts "subject to the overall availability of funding for the scheme and the eligibility requirements".
It said: "The presumption is that housing associations will sell the tenant the property in which they live."
As part of the agreement, the government would "also implement deregulatory measures which will support housing associations in their objectives to help support tenants into home ownership and deliver the additional supply of new homes", the statement said.
It did not specify what the deregulatory measures might be.