Government should help with home building says Treasury Chief Secretary

Government should help with home building says Treasury Chief Secretary

Danny Alexander calls for radical solution that would see government acting as commissioner for housing.

The government should play a direct role in building homes as a way of ensuring that an ambitious target of 300,000 new homes a year is achieved, the Treasury chief secretary, Danny Alexander, has said.

After the business secretary, Vince Cable, warned that George Osborne’s Right to Buy scheme has fuelled a deepening inequality between social classes and the generations on housing, Alexander called for a radical solution which would see the government acting as a “commissioner for housing”.

“It would be an unprecedented change in housing policy, guaranteeing levels of house building not seen since the post war era,” Alexander told the housing fringe meeting at the Lib Dem conference.

The intervention by the Treasury chief secretary came after Cable said that the chancellor’s Right to Buy scheme has inflicted enormous damage and done nothing to encourage the building of affordable homes. The business secretary was speaking during a debate in which the conference passed a motion to give local authorities the ability to suspend Right to Buy in their areas. This would be on the grounds that council tenants were being given huge incentives to purchase their homes without enough replacement of social housing stock.

Cable, who has frequently warned of the dangers of Help to Buy fuelling a house price bubble, said: “The Right to Buy policy, without replacement, has done enormous damage and we have to stop that. Mr Osborne has this policy called Help to Buy, which doesn’t actually help you to buy because it drives up the price and makes it less affordable. What we really need is help to build.”

The Help to Buy programme offers home buyers government guarantees to help them purchase a home worth up to £600,000 with as little as a 5% deposit.

Alexander said that dramatic levels of house building would be guaranteed if the government took a direct role. He told the housing fringe: “If we are to address both the cyclical nature of the market and the structural under supply of housing then I think we also need to consider whether the government should operate as a commissioner of housing. A truly radical approach would be for the government to also have a direct role in house building – not just affordable house building but in the private market also.”

Under Alexander’s plan, the government would suggest how many houses should be built in a given period. If fewer homes were built by the private sector, housing associations and local authorities combined, the government would step in.

Alexander said: “You would have a capacity for the government to step in, to place orders, to pay contractors, build houses, and work out, once they are built, how and when they need to be sold.”

The focus on housing came after Cable accused Osborne of lying to the British people by claiming that a future Tory government could deliver an overall budget surplus in the next parliament without raising taxes. In the harshest Liberal Democrat attack on the Conservatives at the party’s conference, the business secretary said the chancellor was “ideologically obsessed by [spending] cuts” because he wanted to destroy public services and the welfare state.

Cable, who described the Tories as “Ukip but without the beer”, accused the chancellor of dishonesty for suggesting he could eliminate the structural budget deficit by 2017-18 and then run an overall budget surplus, without raising taxes.

Cable said: “The truth is more taxes will be needed – to contribute to deficit reduction and also to address unacceptable inequalities. Any politician who tells you that the next government can balance the budget and avoid tax increases is lying to you.”

  • The Guardian,

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