Trade union Unite has pledged to fight the Government ‘tooth-and-claw’ over proposals to privatise housing associations.

The union has hit out after think tank Policy Exchange called for housing associations to be reclassified as part of the public sector, which would allow them to be privatised at a later stage.

Previously, a key argument for developing social housing through housing associations has been that, as independent bodies, their £60bn debt would not count as public borrowing. Policy Exchange now say that privatising housing associations would be ‘the most obvious’ government reaction to balancing the £60bn debt.

Unite's national officer for the not-for-profit sector, Sally Kosky, said: 'We call on the minister for housing and planning, Brandon Lewis to repudiate the think tank’s ‘blue sky’ thinking.

If this is allowed to go-ahead then what will happen is in the space of less than 40 years the council house stock assiduously built up since the First World War will end up in the hands of "fat cat" property developers, having passed through the ‘housing association’ stage.

At a time when the need for housing has edged to the top of the political agenda, it would be a national scandal which Unite would fight ‘tooth-and-claw’.