Posted by: Jules Birch01/10/2012
It’s great to see Ed Balls putting his - or rather mobile phone companies’ - money where his mouth is on housing but his speech still begs some big questions.
It’s good news too see housing finally making the headlines at the start of a Labour party conference rather than becoming a footnote before they sing The Red Flag at the end.
Media briefing ahead of the speech by the shadow chancellor was all about housing and his call for the £3-4 billion proceeds of the sale of 4G mobile phone licenses to be spent on 100,000 affordable homes and a new stamp duty holiday for first-time buyers. The idea seemed to go down pretty well with delegates judging from the applause in the hall.
The politics of this is important. Labour’s relative silence on housing over the last year has enabled the Conservative side of the coalition to make the running with its social housing reforms.
Coming on top of last week’s Lib Dem conference of a policy paper calling for 300,000 homes a year and calls by Vince Cable for 100,000 affordable homes, this makes clear that there is an alternative.
The financial side of it is much less clear. The 4G auction is due to happen next year so, unless I’m missing something, by the time of the next election in 2015 George Osborne will almost certainly have spent it on other things. If you read his speech carefully (my italics added for emphasis) this point is clear:
‘Let’s use that money from the 4G sale and build over the next two years: 100,000 new homes – affordable homes to rent and to buy - creating hundreds of thousands of jobs and getting our construction industry moving again. Add to that a stamp duty holiday for first time buyers buying homes up to £250,000 and we can deliver real help for people aspiring to get on the property ladder.’
Looked at like that, today’s statement by Balls is not a spending commitment at all, more a statement of intent about what Labour’s priorities will be when there is no money around to spend and a challenge to the government to do things differently.
However, that is still important, especially when combined with the statement by Labour leader Ed Miliband yesterday that housing would be a beneficiary of a tax on bankers’ bonuses.
Balls is promising a zero-based spending review if Labour wins the next election. That could be seen as a political device to avoid having to make spending commitments now but it’s also a signal that departments will have to justify all of their spending programmes from scratch.
The statements by Balls and Miliband therefore give housing an edge in the list of priorities but they do not answer all the questions. Just to take one example, even if the 4G money is still there to spend by the next election it will not mean anything unless it is additional to, rather than instead of, any spending review allocation. If it just means the latter, that would leave Labour spending less than the coalition.
Then there’s the question of whether it’s really worth spending £500 million on another stamp duty holiday. Individual first-time buyers may benefit by up to £1,250 each but would it really do more than just bring transactions forward?
There are much bigger questions for Labour to answer on housing. Will it go for IPPR’s idea of shifting spending from housing benefit to building homes? Will it finally free local authorities from the public borrowing rules (surely a prerequsitie for a serious housing policy)? Will it use quantitative easing for housing rather than boosting bankers’ bonuses? Where does it stand on affordable rent (Martin Hildtich is reporting that the 4G programme would be a mix of shared ownership, affordable rent and social rent)?
I’m hoping we get some answers this week. But this is still a great start and a big improvement on Labour conferences gone by when the housing debate was buried away in the final session and the leadership paid lip service to what its delegates said.
From Inside edge
Housing commentator Jules Birch puts the latest news in context