Thursday, 26 March 2015

Lib Dems accuse Tories of blocking 25,000 homes

Business secretary Vince Cable has blamed ‘Tory dogma’ for blocking the development of 25,000 council homes.

The Liberal Democrat minister claimed his party wanted to relax local authority borrowing rules, allowing them to pool their limits and release up to £2.8 billion. 

In a speech to the Social Liberal Forum in Manchester on Saturday he said some councils were ‘straining at the leash to get ahead and solve local affordable housing shortages and put unemployed construction workers back into work’.

He said these councils should be allowed to access the unused borrowing limits of those that did not.

He claimed this ‘modest step’ would see tens of thousands of homes built.

‘What is stopping them? Frankly, Tory dogma,’ the business secretary said.  

‘And the Tories are hiding behind Treasury methodology, saying that more borrowing by councils beyond permitted limits will break the fixed rules. 

‘So even though freeing up this borrowing space would result in tens of thousands more homes being built, and many times more jobs, they would rather start talking about the cuts they want to make, rather than the houses that we should build.  

‘That is the difference between Lib Dems and Tories on this matter.’

Housing and local government groups lobbied chancellor George Osborne to lift local authority borrowing caps in last month’s spending review. They claim that raising the limits – which were imposed in April 2012 as part of reform of the housing revenue account subsidy system – would allow around 60,000 homes to be built over five years.

The Liberal Democrats are proposing a mechanism that would allow councils that have reached their borrowing limits to take up unused capacity from other local authorities. The plan is contained in a motion that will be presented to the party conference in the autumn by Mr Cable and party leader Nick Clegg, and they say it could deliver between 15,000 and 25,000 homes.

Mr Cable also issued an apparent warning against the controversial help to buy scheme, saying easier credit would make houses ‘still less affordable to the ordinary first time buyer’.

He called for ‘a surge of house building of the kind that lifted Britain out of the inter war slump’, but said the cutbacks in grants were a ‘negative’. 

‘The Tories and Labour didn’t invest in our social housing stock – 1.1 million homes were lost under the Tories and another 420,000 under Labour,’ he said.

‘At the end of the previous government, house building had fallen to its lowest peacetime levels since the 1920s.’

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