Shadow housing secretary criticises new homes vow after admission that funds would come from existing spending plans

Labour has dismissed Theresa May’s proposals to increase social housing, calling them “spin, with no substance”, after the defence secretary, Michael Fallon, admitted the policy would be paid for from existing spending plans.

All the main parties are keen to show they have a solution to the challenge of affordable housing as a growing number of young people find that a property is out of reach.

The Conservatives announced on Saturday that their manifesto, expected to be launched on Thursday, will include a commitment to build what they called a “new generation of social housing”.

Fallon who was appearing on the BBC’s Andrew Marr Show, said the policy would be paid for from capital investment already announced.

He said: “The money is coming from the £1.4bn we earmarked for capital expenditure from the autumn statement. It is not new money.”

John Healey MP (@JohnHealey_MP) Not even 10am and Tories' overnight housing pledge has unravelled. On @MarrShow Michael Fallon admits not a single penny of extra funding.

Labour’s shadow housing secretary, John Healey, seized on Fallon’s comments, saying the Conseratives’ proposals contained “no commitment on the number of new affordable homes or on new funding”, and were “political spin, with no substance”.

Under the plans, a Tory government would seek to strike deals with individual councils, offering them support to build new social housing in exchange for a commitment to sell off the homes after a fixed period, perhaps 10 to 15 years.

Existing tenants would get first refusal on buying the properties, in a conscious echo of Margaret Thatcher’s “right to buy” policy, with proceeds reinvested into more social housing.

Compulsory purchase rules would also be strengthened to make it easier for councils to put together viable packages of land for building new homes, including brownfield sites in urban areas.

The plans demonstrate a shift of emphasis from the approach of David Cameron and George Osborne, who relied on loosening planning rules and subsidising mortgages through the help-to-buy scheme in the hope they would incentivise more building.

In the autumn statement, Philip Hammond set aside up to £23bn over the next five years to boost Britain’s productivity – including, the chancellor said at the time, the lack of affordable housing. A growing number of employers, particularly in London and the south-east, say they are struggling to attract high-quality staff because local housing costs are so high.

Analysis carried out by Labour shows new affordable housebuilding has sunk to a 24-year low, with the latest official figures for housing starts showing fewer than 1,000 government-funded social homes being built.

Healey said: “Theresa May has been at every cabinet since 2010 and can’t sidestep her share of the blame for the Tory housing crisis. The number of homeowners has fallen by 200,000, homelessness has more than doubled and new affordable housebuilding is at a near record low.

Labour has said it would build 1m new homes over the course of the next parliament – 200,000 each year – with half of those earmarked as council housing.

The Liberal Democrats said they would like to see central government step in and commission housebuilders directly to construct new homes if the private sector fails to meet demand.

Brandon Lewis, Home Office minister, refused to put a figure on how many extra affordable homes the government hoped would be built.

Speaking to Andrew Neil on the BBC’s Sunday Politics, he said: “That will depend on the negotiations we have with local authorities; it varies around the country; it’s local authorities that know their area best, and know what their needs are, so no, I’m not going to put a number on it today.”

He added: “It’s not just about the money. For a lot of local authorities it’s also about the knowledge and the expertise of how to do it. That’s where the support of the Homes and Communities Agency, and Sir Edward Lister’s team there, is so important.”

Jeremy Corbyn has said alleviating the housing crisis would be his first priority if he became prime minister, and housing charities welcomed the fact that the issue has become a key focus of the campaign.

Anne Baxendale, the director of communications, policy and campaigns at Shelter, said: “We’re pleased to see cross-party consensus on the need to tackle the housing crisis and welcome pledges to build a new generation of homes to rent. This will come as great relief to the millions of ordinary families currently languishing in the private rented sector, especially those on low incomes who spend a huge chunk of their income on sky-high rent.

“Giving councils access to land more cheaply, including brownfield sites, and allowing them to borrow money to build the homes communities need is a huge step forward,” Baxendale added.



The Conservatives’ housing policies were among a flurry of announcements at the weekend, including Labour’s pledge to levy a transaction tax on City institutions. It hopes the so-called Robin Hood tax would raise up to £26bn over the course of the next parliament – and help to discourage unnecessary speculation in financial markets.