20/08/2012 05:36 BST | Updated 20/08/2012 11:27 BST

Policy Exchange Accused Of 'Social Cleansing' After Urging Councils To Sell Off Prime Property

A right-wing think tank has been accused of pushing for the poor to be driven out of wealthy areas after suggesting councils should sell off expensive houses to fund new building.

Policy Exchange, an influential think tank set up by Conservative MP Nick Boles - an ally of prime minister David Cameron - said the UK could afford to build 170,000 social homes a year by putting the highest-value properties on the market when they become vacant.

In its report Ending Expensive Social Tenancies, the think tank says one in five houses owned by local councils are worth more than the average house price.

Labour MP for Westminster Karen Buck, told The Huffington Post UK the report didn't make sense, adding "behind the beguiling simplicity of the idea lie some complex realities."

"The number of council homes has already plummeted over the last 30 years because of Right to Buy with boroughs like my own seeing a near-halving of stock. When this policy came in, Margaret Thatcher promised lots of new homes from the proceeds, but the sold homes were never replaced and most of the money disappeared into the Treasury...

"People who would once have been eligible for a council home ended up in expensive private rented homes, with the same effect. So the promise was made and broken before. Would it be different now?"

Former deputy prime minister John Prescott has accused the think tank of trying to drive the poor out of richer areas, saying on Twitter that the report amounted to trying to "kick [the] poor out of rich areas."

The former leader of the Lib Dems in local government Councillor Richard Kemp accused the group of trying to create "ghettos", adding that it would "create social problems for the future."

Policy Exchange deny the policy would create 'social cleansing'

But Policy Exchange's Neil O'Brien rejected claims it would lead to social cleansing, telling Today: "There would still be social housing in very expensive areas under our proposal; there would just be a little bit less of it.

"And the truth is I don’t believe anybody has a right to live in the most expensive part of town.

"People do have a right to get housed, but just not to be housed in the most expensive areas.”

Housing Minister Grant Shapps said he was 'determined that we get Britain building."

"Councils looking to sell vacant social housing can now keep the receipts to invest in affordable housing, regeneration or paying down housing debt in their area."