Live blog: Autumn statement 2014

17.30

And that’s a wrap. Although George Osborne’s speech said little on affordable housing itself today, Tuesday’s infrastructure announcement gave the sector enough to talk about.

Here are some of key housing-related announcements made over the last two days.

Wednesday:

• The current stamp duty system, under which it jumps by a fixed amount at certain thresholds of home values, will be removed and replaced by a system more akin to income tax, where taxpayers only pay a percentage on the amount over a certain band
• The government is ‘on track’ to meet its welfare cap commitment
• Mr Osborne will freeze universal credit work allowances for a further year until 2018
• Financial incentives to councils who reduce housing benefit fraud and error
• As part of Mr Osborne’s plan to create a ‘northern powerhouse’, he promises to set up a sovereign wealth fund for the north funded through shale gas extraction
• The Treasury says it ‘will work with housing associations, lenders and the regulator to identify and lift barrtiers to extending shared ownership’.

Tuesday:

• The government will pilot its plan to directly commission new housing with a 10,000 home scheme in Northstowe, and carry out a detailed review of rolling this policy out nationwide
• The Affordable Homes Programme will be extended by two years until 2020, with an additional £957m of grant and 275,000 homes over the life of the next Parliament
• The government will consult on lifting borrowing restrictions for stock transfer landlords and removing the barriers to shared ownership
• It will support plans for a new garden city in Bicester and provide infrastructure for big developments in Barking and Ebbsfleet

17.00

Just as the dust settles on the chancellor’s Autumn Statement, the Guardian has the scoop that Vince Cable ‘demanded that the Office for Budget Responsibility spell out the difference between Tory and Liberal Democrat economic plans amid concerns that the Treasury has not been honest enough about the impact of future spending cuts’. Does this intervention spell a death knell for Liberal Democrat collaboration with the Tories on the economy? Nick Clegg was notably not present today as George Osborne gave his statement in the House of Commons.

16.45pm

John Swinney, Scottish Deputy First Minister, couldn’t resist a cheeky swipe at the coalition over the stamp duty changes. The Scottish government has previously pledged to reform stamp duty and replace it with a land and buildings transaction tax, which comes into force this April.

‘Imitation is the sincerest form of flattery,’ Mr Swinney crows. He says the Scottish plans will remove tax from 5,000 purchases between £125,000 and £135,000 and ensure that over 80% of house purchasers in Scotland are better off than under the new UK regime.

16.30pm

Campbell Robb, chief executive of Shelter, says although George Osborne has taken a ‘sensible step’ with stamp duty, it is ‘unlikely to help’ families across the country who want to get a foot on the housing ladder. ‘For them the fundamental barrier will remain the sky high cost of housing, with these changes set to make little or no difference to how easily they are able to afford a place to call home,’ he says.

16.15pm

There’s been more criticism of George Osborne’s work allowance freeze, which campaigners say will make it harder for households to get into work. The Citizens Advice Bureau tweets: ‘Freezing work allowance for people on universal credit, as announced in Autumn Statement, will mean many find it harder to make work pay.’

16.04pm

There’s bleak words for council workers and other public sector staff on pay today. The Autumn Statement document says: ‘To deliver reductions to departmental spending, the government has also exercised firm restraint over public sector pay. Public sector pay restraint in this parliament is expected to save an estimated £12bn by 2014/15.’

But the crucial bit is here:

‘The government will need to continue to reform, and take tough decisions on, public sector pay while it continues to reduce the current budget deficit until 2017/18, and would expect to deliver commensurate savings.’

Industrial action hit services across the country in July when public sector workers went out on strike over pay.

15.56pm

Some interesting stuff here from the Autumn Statement document on what the Smith Commission’s recommendations mean for the Barnett formular in Scotland. It says: ‘The Smith Commission has confirmed the Barnett formula will continue to be used to determine changes in the Scottish government’s block grant in relation to public services.

‘A deduction will be applied to the block grant to reflect the Scottish government’s tax powers. As a result, the importance of the Barnett formula will effectively be reduced by around two thirds, with changes in the Scottish government’s budget increasingly determined by changes in Scottish tax receipts.’

15.44pm

RICS says the stamp duty changes are ‘long overdue’. Jeremy Blackburn, head of policy adds: ‘These changes reduce distortion and ensure those at the top end of the market contribute fairly, while those at the bottom will be given a fairer chance to get on the ladder, cutting out ‘dead zones’ in the market.’

15.30pm

The British Property Federation says they would have liked ‘a little more notice’ from Mr Osborne before he announced that change to stamp duty. Liz Peace, chief executive of the BPF, says because the changes will mean owners of higher value properties are paying more, ‘this will hopefully be the death-knell for any more talk of mansion taxes’.

15.16pm

George Osborne’s decision to freeze work allowance within universal credit has been greeted with condemnation by anti-poverty campaigners. Work allowance is the amount a household can earn before the amount of universal credit they can claim tapers off.

Lily Caprani, director of strategy and policy at the Children’s Society, says: ‘The freeze announced today will make it harder for parents to move into work and force them to make impossible choices about giving their children the basics.’

Work allowances were already frozen for three years from 2014 at the chancellor’s last Autumn Statement. This means that working families will now miss out on four years of inflationary uplift, meaning a large real-terms cut.

15.07pm

Despairing response to the autumn statement from Alex Hilton, director of pressure group Generation Rent. He said: “The UK’s 10 million private renters pay twice as much of their income on housing as people with a mortgage do and yet the Chancellor has given them nothing unless they’re lucky enough to have a deposit saved up. Even then, first time buyers might find that, as the market adjusts to this news, the price tag of their dream home will suddenly go up by what they would have been paying in tax already.”

14.54pm

One policy that has so far not go much attention but may be of interest to social landlords: the autumn statment document reveals the government will consult on plans to make it easier for landlords to sell shared ownership properties. The treasury says it ‘will work with housing associations, lenders and the regulator to identify and lift barrtiers to extending shared ownership.’

14.21pm

The government has also announced plans to give financial incentives to councils who reduce housing benefit fraud and error.

13.36pm

And that’s it - no mention of housing apart from the aforementioned stamp duty cut. The major affordable housing announcements were announced yesterday by Liberal Democrat Danny Alexander, which in itself raises questions about the parties priorities -Are the Conservatives really behind the plan for direct government commissioning of new homes?

13.22pm

Here it is - a pre-election gift to homeowners and aspirant homeowners. Mr Osborne announces an overhaul of stamp duty from midnight tonight. The current system, under which stamp duty jumps by a fixed amount at certain thresholds of home values, will be removed. It will be replaced by a system more akin to income tax, where taxpayers only pay a percentage on the amount over a certain band. Mr Osborne says the changes will cut stamp duty in 98% of home sales and amount to a £800m tax cut overall. He said somebody buying a house for £270,000 would pay £4,500 less under the new system.

The new stamp duty rates.

• No tax on the first £125,000 paid
• 2% on the portion up to £250,000
• 5% up to £925,000
• 10% up to £1.5 million
• 12% on everything above that.

13.18pm

As part of Mr Osborne’s plan to create a ‘northern powerhouse’, he promises to set up a sovereign wealth fund for the north funded through shale gas extraction. The sector will hope some of this investment will find its way into housing- sovereign wealth funds have invested in homes before.

The chancellor also said his ‘door is open to other cities’ who want to follow Manchester’s example of devolution of powers- which included control over a £300m housing investment fund.

12.57pm

The government is ‘on track’ to meet its welfare cap commitment, Mr Osborne said. The government has set a cap on overall welfare spending of £11.5bn in 2015-16. Mr Osborne also said the government will freeze universal credit work allowances for a further year.

12.52pm

Mr Osborne admits revenues are expected to be £23bn lower than expected in 2018/19. He said this is off-set by welfare cuts and lower interest payments.

12.39pm

The autumn statement gets under way with George Osborne making an early promise to ‘back aspiration’ by supporting people who want to own their home.

12.12pm

At PMQs, David Cameron gets in a last minute prediction for the Autumn Statement. He says that after the statement, Ed Miliband ‘will be looking as awkward as when he ate that bacon sandwich’. Mr Miliband hits back saying the PM has ‘turned breaking promises into an art form’.

11.50am

The government has an Autumn Statement page on its website. It rather helpfully explains what it actually means: ‘The Autumn Statement provides an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility (OBR).The forecasts, called the Economic and fiscal outlook (EFO) are published twice yearly, at Budget and at Autumn Statement. They look at the future performance of the UK economy, in this case for the period to 2018-19.’

11.43am

Over at the New Statesman, Jonn Elledge says although Bicester was named as one of the government’s three new garden cities yesterday, we will be need to build ‘six or seven of them every year’ in order to solve the housing crisis. ‘In other words, for garden cities to solve the housing crisis, we’d need to build six or seven of the things every year. This is clearly not something we’re going to do. The contribution garden cities will make to fixing this mess will be tiny.’

11.34am

Unison, which represents staff at housing associations and councils across the country, says the Autumn Statement gives Mr Osborne ‘one last chance to bring some relief for workers and admit he got it wrong’.

Dave Prentis, the union’s general secretary, says: ‘By cutting public spending, the government hascreated the biggest squeeze since Victorian times.People simply can’t afford to live on their wages and many have had to borrow more and get second jobs to make ends meet - people working round the clock to ensure they can keep their homes, pay their bills and feed their families.’

11.20am

Sector figures wrote to the chancellor in the Times this week, calling for the lifing of the local authority borrowing cap. It says such a move would be ‘one of the most sensible decisions that George Osborne could announce’.

In the letter, signed by people including Sir Steve Bullock from London Councils and Grania Long from the Chartered Instutute of Housing, it is said: ‘New homes can help to create jobs, cut benefit bills, form stable communities and address the backlog of housing need, a key concern for employers. One way to make this happen is to lift the cap on local authorities’ housing revenue accounts, which would allow councils and their partners to maximise the social and economic value of house building.’

Wednesday December 3 10.16am

Good morning. George Osborne is due to make his Autumn Statement today. A number of infrastructure announcements were announced yesterday by chief secretary to the Treasury Danny Alexander. Here is a summary of the key points:

Key Announcements

• The government will pilot its plan to directly commission new housing with a 10,000 home scheme in Northstowe, and carry out a detailed review of rolling this policy out nationwide
• The Affordable Homes Programme will be extended by two years until 2020, with an additional £957m of grant and 275,000 homes over the life of the next Parliament
• The government will consult on lifting borrowing restrictions for stock transfer landlords and removing the barriers to shared ownership
• It will support plans for a new garden city in Bicester and provide infrastructure for big developments in Barking and Ebbsfleet

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17.35pm

Inside Housing’s live coverage is finished for the day. Check back from 10.00am tomorrow for all the build up to Autumn Statement, expected at around 12.30pm.

17.30pm

The Home Builders Federation (HBF) has welcomed the measures Mr Alexander announced to speed up the planning process. Specifically, these include moves to shorten the negotiation process for s106 agreements which will include revised government guidance. The government will also launch a consultation to streamline compulsory purchase orders, aiming to bring forward more brownfield land.

Stewart Baseley, executive chairman of the HBF said: ‘Measures to speed up the planning process are positive and what the industry has been calling for. We need a system that is responsive to current housing needs and not one that acts as a constraint. The current system is too slow, overly complex and costly. Such improvements can only help get more sites started more quickly.’

16.10pm

Campbell Robb, chief executive of Shelter, said the charity would be ‘watching closely to see if this new thinking turns into substantial action’.

He joined Grainia Long and Tom Murtha in criticising the lack of funding for homes at social rents. ‘We can’t forget that homes for affordable rent are far from affordable for many, and with the number of social rented homes plummeting it’s essential that there are also more new homes for those on low incomes,’ he added.

‘These measures signal a commitment to tackle our housing crisis, but to give back hope to the millions struggling with high housing costs there is still a long way to go.’

14.40pm

Tom Murtha, a campaigner for social housing with the pressure group SHOUT, said he is ‘disappointed that another opportunity has been lost to recognise the need for substantial government investment in social housing’.

‘The measures in the announcement will do little to solve the main issue which is that not enough new homes are being built at rents that people in need can really afford,’ he said.

Meanwhile, lawyer Robert Beiley, a partner at Trowers and Hamlins, issued a note of caution about the challenging nature of Mr Alexander’s big plan.

‘The fact that Danny Alexander has spoken only in terms of Treasury undertaking a feasibility study shows how challenging the concept of direct housing provision by the state is, not least because of the impact on public sector borrowing,’ he said.

13.40pm

Andy Rose, chief executive of the Homes and Communities Agency (HCA) said the announcement reflects ‘the government’s confidence in the HCA’. The agency will lead the development at Northstowe, where the government is piloting its plan to become a direct commissioner of housing.

‘As a priority site for us, and our council partners, the HCA will lead development at Northstowe, making full use of our commercial, planning and strategic development expertise gained through the support we already provide to partners in developing their strategic priorities on sites around the country,’ said Mr Rose.

He said the two year extension to the affordable homes programme ‘gives continued momentum for affordable housing delivery’ and shows the government ‘recognise the importance of affordable housing in meeting local priorities and contributing to overall housing supply’.

12.30pm

John Harding, a senior partner at chartered surveyors Daniel Watney, said direct government building could unlock brownfield sites which have potential for one million new homes.

‘The costs of developing on brownfield land deter many private developers,’ he said. ‘If the government takes direct control for building, this could generate significant value in the years ahead, as well as creating the thousands of new homes that we so desperately need.’

11.50am

Grainia Long, chief executive of the Chartered Institute of Housing (CIH), said the ‘radical solution’ of the government directly commissioning homes is ‘very welcome’.

‘The only time when we have built anywhere near the number of homes we need in recent history has been when the government has played a direct and active role in providing new homes,’ she said.

However, she called on the government to fund homes for social as well as affordable rent in its extension of the affordable homes programme. ‘We need more homes for social rent so that people struggling on low incomes can afford a decent home.  Affordable rent has a role to play but it doesn’t work for everyone,’ she said.

Meanwhile, the British Property Federation (BPF) has welcomed commitments to consult on changing the regime of compulsory purchase orders and speed up s106 negotiations.

Liz Peace, chief executive of the BPF, said: ‘Reform of compulsory purchase orders to help bring brownfield land back in to use is long overdue. Speeding up section 106 negotiations, which can often drag on for many months, is also hugely welcome.’

11.32am

Another two policy announcements that were not specifically mentioned in Mr Alexander’s speech this morning. Firstly, he has agreed to launch a consultation on how housing associations are allowed to value their properties for borrowing purposes. This will allow stock transfer landlords more freedom to borrow and build, and was something the NHF had called for in the build up to the autumn statement. Inside Housing revealed last month that government was considering this change.

Ruth Davison, director at the NHF, said: ‘We also welcome the commitment to consult about changing the way housing associations value their properties to enable them to borrow more money and invest in local communities, at no extra cost to the public purse – ultimately producing tens of thousands of new homes. It recognises the key role housing associations have in ending the housing crisis.’

The government will also ‘work with housing associations, lenders and the regulator’ to lift barriers to extending shared ownership. This will include a consultation on streamlining the process for selling-on shared ownership homes.

11.14am

To recap, the major announcements from this morning. The government will pilot its plan to directly commission new housing and will also extend the affordable homes programme by two years. Our news story on this major policy announcement is here.

The government has also outlined plans for a 13,000-home garden city in Bicester as well as £55m for a rail link to unlock an 11,000-home scheme in Barking, £100m to fund infrastructure and pay-off landowners to kick start the development of the 15,000-home development at Ebbsfleet and support the development of 7,500 homes in Brent Cross.

10.26am

The Treasury has provided more details about its plans to extend the affordable homes programme for two further years from 2018. It says the capital funding for affordable housing will be £957m in 2018/19 and 2019/20 and the government will aim to build 275,000 new affordable homes over the next parliament.

10.09am

Elsewhere, the National Housing Federation (NHF) has put out a fresh statement re-iterating its main asks of the government ahead of tomorrow’s Autumn Statement. The NHF is calling for more freedom for associations over rent-setting and how they value their stock. It also wants an extension to the government’s guarantees programme.

10.03am

Mr Alexander leaves promptly at the end of the event, with many questions about the project remaining unanswered. 

For now, some further details about Northstowe- the site where his commissioner of housing dream will be piloted.

The Homes and Communities Agency will take the lead on delivering the site, including master planning and ‘commissioning’. This will see it delivered ‘twice as fast as the conventional development routes’, and the government will report on the ‘feasibility and economic impacts of pursuing this model at a wider scale’. 

‎As the hacks file out of the briefing, there are mutters about ‘Soviet building targets’ and ‘you won’t see it in NIP 2015’. But it looks as if housing is going to be the headline from this morning.

09.48am

The stuff about direct commissioning of housing, despite being one of the headline announcements, is buried in a single paragraph on p28 of the glossy 150-page plan.

‘On a scale of one to 10, how enthusiastic about this idea is George Osborne?’ one hack asks.

‘This is the policy of the government, to take forward this review to see if it’s the sort of thing that can make a difference,’ he replies.

09.39am

Mr Alexander challenged on whether the government’s directly commissioned homes  will need to be built on green belt. 

‘I don’t ‎necessarily accept what you say about where homes would need to be built,’ he says.

‘That needs to be worked through.’

He says public sector land could provide a lot of the necessary sites- with Northstowe, a former RAF base, listed as a ‘classic example’.

09.28am

So to recap the big infrastructure announcements this morning for the housing sector-

-What has been initially described as a two year extension for the affordable homes programme. Inside Housing will bring you more detail on this as it emerges. 

- ‎The government will carry out a ‘detailed review’ of becoming a direct commissioner of housing. It will pilot this model on a 10,000 home site in Northstowe. Mr Alexander said this was being ‘examined as a solution for the country as a whole’.

09.23am

Danny Alexander tells the crowd we need 300,000 new homes. ‘To get there requires us to think radically‎,’ he says. He sets out the plan first announced at the Lib Dem conference, to set a target for the number of homes the country needs and then step in directly if the sector cannot deliver.  ‘We are taking this forward in two ways,’ he says.  Firstly, there will be a detailed government review to examine the idea’s potential. Second, it will be piloted on a site in Northstowe. The government itself will act as a developer for 10,000 homes on its own land. ‘This is the first time in a generation the government has acted as a developer on its own land in this way,’ he says. He adds that the model is being ‘examined as a solution for the country as a whole’. This is big stuff from Mr Alexander, and potentially huge changes for the way the sector works.

9.16am