Ed to set out £6billion plan to build 100,000 affordable homes

Ed Balls will today call for an extra £6 billion to be invested to build an additional 100,000 affordable homes in a major new programme of house building.

The radical plan is aimed at creating hundreds of thousands of private sector jobs, boosting economic growth as the UK and global economic recovery remain fragile and tackling the urgent shortage of decent affordable housing.

Ed will argue that the government should use half of a £12bn windfall to the public finances in recent months, as a result of Labour’s actions including lower unemployment than forecast, to fund the rapid expansion of house building.

HM Treasury figures published in July 2010 show that actual borrowing in 2009/10 came in at £155bn, which is £12bn lower than Alistair Darling’s Budget forecast in March of £167bn and £20bn lower than the Budget 2009 forecast of £175bn.

Based on figures from the National Housing Federation, the extra £6bn investment Mr Balls is calling for, together with matched funding from housing associations, would see an additional 100,000 homes built.

The Home Builders Federation state that every home built creates 1.5 fulltime jobs plus up to four times that number in the supply chain. So increasing the output of homes by 100,000 would generate up to 750,000 jobs.

Ed Balls will also argue that rather than raising VAT on the repair, maintenance and improvement of housing to 20 per cent from January, a temporary rate of 5 per cent should be created, cutting the costs for households investing in the value of their home, and creating thousands more jobs. In the short term this could be paid for by part of the remaining £6 billion windfall, but the evidence from when this has been tried in other countries is that the actual tax take increases as a result.

Mr Balls will unveil the policy at an event held at the National Housing Federation in central London today alongside shadow housing minister John Healey, shadow work and pensions secretary Yvette Cooper who will launch a campaign against Tory plans to cut housing benefit, and former London Mayor Ken Livingstone who will set out his vision for housing in the capital.

In an article for the Labour List website Ed Balls writes:

There can be no doubt that the extra homes are needed. With four and a half million on housing waiting lists and two and a half million in overcrowded accommodation, more affordable homes would meet an acute social need.

Since Alistair Darling’s March Budget – thanks to our economic recovery plan – tax revenues have been higher and spending on welfare and unemployment lower than predicted. The public finances are around £12 billion healthier than forecast at the time of the Budget.

The coalition wants to use that extra money to pay down the deficit faster.I think that at a time when the economy is still so fragile and other countries are already tipping back into recession, we should instead use that money to boost construction jobs and build new homes.

By using half of that £12 billion, a £6 billion investment this year and next, we could build 100,000 extra affordable homes which it’s been estimated would create up to 750,000 new jobs, directly in the construction industry and indirectly in the supply chain including thousands of apprenticeships for young people.

Crucially, all the extra growth and tax revenues these plans would create would help us pay down more of the deficit later on when the economy is fully recovered.

Former London Mayor Ken Livingstone said:

I very much welcome the proposals Ed Balls has set out to invest in house-building both to build much-need more affordable homes and to stimulate the economy so that we invest our way through this difficult economic situation rather than slashing services and endangering growth.

In London we need to break the back of the housing shortage but Boris Johnson has watered down measures to guarantee more affordable homes and has been inactive and uninspiring in the face of London’s housing challenge. Government cuts will make this even worse.

Ed Balls is right to challenge the lazy and damaging consensus the government is seeking to create that we have no choice but to cut services to the bone. Ed’s proposals to stimulate house-building and boost the economy indicate a Labour alternative to the government’s assault on jobs, pay and services is both possible and necessary.

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Posted August 31st, 2010 by Ed's team

4 Responses to “Ed to set out £6billion plan to build 100,000 affordable homes”

  1. Doreen McCormack says:

    I agree the country needs more affordable houses building. However, I am against social housing stock being “sold off” into private hands.
    If more are built and more are sold we will always have a shortfall and be unable to house those people who are not in a position to buy.
    Furthermore, if the “right to buy” policy remains it should not be possible for an occupant to purchase for at least ten years.
    Also we have so many people on waiting lists for housing due to the demands made by immigrants.

  2. Lewis White says:

    Dear Ed,
    At various times in the 20th Century, governments invested in creating new, decent quality homes (often in well-designed landscapes) in both town and countrside to provide decent homes for the working urban masses and also for the isolated rural working class. Yes, in the 60’s and 70’s there were some design disasters of the peripheral estates of cities and the concrete jungle estates, but some of the most humane environments are actually council estates.

    Sadly, David Cameron has addressed the need for revitalising villages with new affordable housing, not Labour. I hope Ed , if PM or inanother role in government, will not forget the crying need to re-vitalise the countryside with houses for people born in the area and needing to work there.

    In addition, demolition of the failed housing experiments of the concrete jungle estates and rebuilding with well-planned eco-friendly buildings, and refurbishment of homes and blocks in the towns and cities– especially the sad run down estates on the edges of many towns — must not be forgotten. Numbers of new homes is good press, but far better to refurbish if possible. Refurbsihment and restoration must be regarded as just as important– it creates local jobs more effectively than new build which often imports labour from out of area. !.

    Please don’t forget that the landscape of new housing is as important as the buildings– poor quality landscape is a hallmark of the most deprived estates. Is it just a co-incidence?. No, good landscape makes people feel secure and confident, reduces crime, and is very important to creating liveable cities and villages.

    I can’t help feeling that to guide its policies, Labour needs a serious think tank of design professionals– Town planners, landscape architects, architects, chartered surveyors and developers., engineers, …………… people who know about creating good communities……………… not PR people of the Blair years. So Ed, please don’t chase the numbers— launch a new renaissance of excellent design, eco-friendly twons and village development, that would be looked ack on as a real achievement. !

    Finally, to boost the economy, it must be remebembered that employment is created in suppliers, many of whom are UK based. Stop-go construction does not provide the stream of orders that UK factories need to stay in business. Stop-go = exporting jobs. Consistent investment= UK firms expand and innovate.

    Good luck with the campaign.
    Lewis White. Chartered Landscape Architect, Coulsdon. Surrey.

  3. Angela Picknell says:

    This is a very important issue and it is good that Ed Balls sees it as a priority. I support the plan but am unsure exactly what ‘affordable’ means – does this only mean affordable to buy or also affordable to rent? I agree that vital ’social’ housing should not be sold off, and I think we need to change our attitudes to renting. Why is everyone expected to want to own a house? I also like the above comments – we need people with expertise and vision to design people-friendly and environmentally sound places that can encourage civil community living – perhaps more consultation with tenants? I am a Londoner and have lived in council estates that won design awards for the architects but were a nightmare to live in, but on the positive side, London has many great Local Authority houses and flats of various ages that illustrate a very interesting record of a commitment to social housing, and of its architectural history, and there has been extensive refurbishment over the past 10 years or so. Many low wage Londoners live in decent housing. We must take a pride in continuing to improve, for people on limited incomes in all parts of the country, the provision of affordable/rented accommodation. If we knew our children would not have to sweat blood just to have and keep a roof over their heads, who knows what more interesting ways we could find to save and invest our spare cash.

  4. Ron Higgins says:

    Yes, we need more affordable housing-and yes it was us here in Britain that caused the property fueled mania that the Banks were only too happy to gamble on- With “right to buy” and “Buy to Let” -any idiot could see the more House prices rose the more the banks lent- and the more unaffordable housing would become for first time buyers-Resulting in Banks lending more and more to people to purchase properties beyond their repayment capabilities on the blind belief that property would always boom-but without first time buyers the ladder would always fall.
    As a Labour party we should always address the basics of life first – Being -fair employment-education-and affordable accomodation-This is where New Labour failed I have no doubt that New Labours policy of not regulating house price rises allowing property speculation to go through the roof-was the cause of the Global banking crisis-from here to America we exported the property ladder greed and speculation and the Banks through their greed exploited this to their own detriment-first they overlent then played pass the parcel with bad debts for bonuses-result global banking meltdown-We warned of this in 2005-

    To keep housing affordable and in control the most obvious way would be to tax Equity on property in a fair way-of course if you’ve spent time and money on renovations this much would be deducted from Equity tax also of course there should be time and inflation allowances -but at the end of the day a roof is a roof and selling one home valued at say £500,000 or converserly £200,000 should make no difference to purchasing at the same level.Hence it makes very common sense to control house pricing and to Tax property speculation at a fair level-

    We would also suggest that a massive programme of social housing building be started -yesterday if not sooner-and in this concern the allocation of
    council/social housing needs to be addressed-in terms of waiting list times and not economic immigration needs.

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