Ed Balls launches housing campaign

Labour leadership contender Ed Balls was today joined by shadow housing minister John Healey, shadow work and pensions secretary Yvette Cooper and former Mayor of London Ken Livingstone to campaign on building more affordable housing and opposing the coalition’s proposed housing benefit cuts.

Ed Balls today called 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.

As part of their campaign Ed Balls, Yvette Cooper and John Healey are also calling on the Tory-Lib Dem government to stop their proposed housing benefit cuts and to come clean about their full impact.

Government figures show big losses for the poorest families in the country.

  • From next year over 50,000 of the very poorest pensioners will lose on average more than £11 a week.
  • From next year, hundreds of thousands of low income working families will lose on average more than £12 a week.
  • And tens of thousands of severely disabled people will lose on average more than £13 a week.

But the full figures are likely to be much bigger – and Shadow Work and Pensions Secretary Yvette Cooper is calling for the government to come clean about the true extent of the impact of the cuts:

  • The full cuts for families in private rented accommodation are likely to be considerably higher than the £12 average loss the government admitted to on 23 July, as the government’s analysis covers less than a third of the £2.3bn to be cut from housing benefit in total.
  • The full cuts to housing benefit are in fact £2.3 billion a year rather than the £1.7bn a year announced at the Budget, because the government is also removing the extra support of up to £15 a week for those who have chosen the cheapest accommodation.

Yvette Cooper and Ed Balls are urging people to respond to the statutory consultation on the cuts by the Social Security Advisory Committee, which Ministers have tried to hide, and which closes on 10 September.

Ed Balls believes 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. A £6bn investment would see an additional 100,000 homes built, and create up to 750,000 jobs.

Ed Balls said:

“Our campaign against the coalition’s housing policies does not just mean fighting for the new affordable homes families badly need, but also standing up for people who can’t afford their own homes.

“Hundreds of thousands of the poorest and most vulnerable people in our society will not have the money to pay their rent if these plans to cut housing benefit go through. And George Osborne has the gall to describe this as progressive. That’s why we will oppose these deeply unfair plans.”

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.”

Rt Hon John Healey MP, Shadow Minister for Housing and Planning, said:

“The Government has made a political, not an economic decision, to have the deficit dominate their policies, because they want to see a smaller state. But with market analysts increasingly worried about the likelihood of slower economic growth or a slide back into recession there is a better fiscal alternative to ‘cut, cut, cut’.”

“This year’s deficit is £12bn less that was forecast in the spring. We should use some of this funding to build urgently needed new affordable homes, boost jobs and strengthen growth. The alternative housing plan that Ed Balls and I propose could mean up to 100,000 new homes across the country, and thousands of badly-needed building jobs and apprenticeships in a construction sector threatened by a slide back into recession.”

Rt Hon Yvette Cooper Shadow Work and Pensions Secretary said:

“Ministers claimed the Budget was progressive, but only because they refused to count the impact of housing benefit cuts. Even on the government’s recent partial analysis, the poorest pensioners and working families are set to lose hundreds of pounds next year – and this is likely to increase as the full effects are felt. This will push people into homelessness and poverty. It is a savage attack on vulnerable families and is deeply unfair but it will also end up costing us all more in temporary accommodation and support.

“Ed Balls is right to make housing a central part of his leadership campaign –setting out serious policies and practical alternatives as well as fighting the deeply unfair government plans. Labour needs to stand up for the poorest and most vulnerable people in the country who are at risk of losing their homes. We must fight these government plans every step of the way.”

Notes to Editors

  1. Ed Balls will unveil the campaign 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 and former London Mayor Ken Livingstone.
  2. 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.
  3. Based on figures from the National Housing Federation, the extra £6bn investment – together with matched funding from housing associations – would see an additional 100,000 homes built.
  4. 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.
  5. The independent Social Security Advisory Committee has launched a statutory consultation on the housing benefit changes due to come in 2011/12. The consultation closes on 10 September 2010.
  6. DWP Explanatory Memorandum to the Social Security Advisory Committee on the housing benefit measures page 11 shows that in 2011 the government is also removing the excess of up to £15 paid to those who have chosen the very cheapest accommodation. This cuts an extra £550 million a year by 2014/15 on top of the £1.75bn set out in the Budget – making a total of £2.3bn annual cuts. This proposal had been rejected by the Labour government in December 2009.
  7. Section 1 Table 1 Annex D. DWP Explanatory Memorandum to the Social Security Advisory Committee July 2010 shows an average loss per household of £12 a week. But the DWP figures cover only £585m of the total of £2.3bn annual cuts – less than a third of the total cuts in housing benefit by 2014/15. The figures exclude £390m from uprating Local Housing Allowance in line with CPI rather than average rents, £340m cuts in support for families with grown up children, £110m cuts for long term job seekers and £490m cuts in the social sector.
  8. Even for the four policies the Government does model, the DWP Explanatory Memorandum to the Social Security Advisory Committee July 2010 Annex D table 1 shows the impact is an “average loss per loser” of £12 a week, with an estimated number of losers of 936,960. This only accounts for £585m of savings. However page 11, paragraph 28 shows that the full savings from these measures alone is £970m by 2014/15.
  9. Ed Balls’ article calling for 100,000 extra homes to be built is at http://www.labourlist.org/ed-balls-an-alternative-plan-on-housing
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Posted August 31st, 2010 by Ed's team

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