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The Blair government has been battling on many fronts since it was elected in 1997. In particular it has been striving to put an end to the housing shortage which is threatening the economy of the country as well as social cohesion. This requires substantial central government intervention. It has also been attempting to implement a vast program of decentralisation which entails greater regional autonomy. This article seeks to demonstrate why these two policies are difficult to reconcile and how they contradict certain official New Labour principles.