Balls attacks government’s ‘spare homes subsidy’
The shadow chancellor has accused the government of subsidising millionaires who want to buy homes at the same time as it is penalising social tenants who have spare rooms.
Speaking during a debate in parliament on the Budget yesterday, Ed Balls said: ‘The government are basically saying, “If you’ve got a spare room in a social home you’ll pay the bedroom tax, but if you want a spare home and you can’t afford it, we’ll help to you buy one”.’
Mr Balls was contrasting the announcement of a £3.5 billion initiative to support home buyers, announced in the Budget and the ‘bedroom tax’ under-occupation penalty for social tenants, which is due to come in from 1 April.
Under part of the government’s homeownership plans, labelled help to buy, buyers will be able to secure 95 per cent loan-to-value mortgages backed by a government guarantee to buy existing or new homes valued at up to £600,000. The current scheme, newbuy, only covers new homes.
The scheme has drawn criticism since it was announced by chancellor George Osborne on Wednesday for appearing to help well-off individuals to remortgage at more competitive rates, or potentially buy second homes.
Mr Balls asked business secretary Vince Cable whether the scheme would apply to second homes and buy-to-let properties. The minister responded: ‘The scheme has not yet been designed in detail. It was typical of the Labour party that it frequently launched into half-baked schemes without thinking about the detail. This is a major change and it will be planned carefully.’
Mr Balls also asked why the Budget did not do more for affordable housing. ‘We will solve the housing crisis and help first-time buyers only if we finally build the new affordable homes that we said should be built but which he ignored in this Budget,’ he said.
Mr Cable denied this, saying the Budget ‘included a significant increase in support for affordable housing in the social sector’.
Of the £4.5 billion of housing support announced in the Budget, £225 million is to be spent on affordable homes.
Mr Osborne was quizzed on support for affordable housing on BBC Radio 4’s Today Programme yesterday. He said: ‘I don’t think the solution to our housing situation is simply to build more social homes, we also need to help people who want to own their own home, or indeed help people who want to build homes for private rent.’
