Copyright: photoeverywhere
Copyright: photoeverywhere

Here’s my test for the budget announced on Wednesday – does it respond to the most urgent problems in housing right now? In my view, it completely fails to address – or even acknowledge – the most urgent housing issues facing this country.

It makes the housing affordability crisis worse

Millions of people are desperate to own their own home, and high rents are putting terrible pressure on household budgets. However, there was very little to help first-time buyers in the budget announced this week and nothing to help renters who are getting into difficulty as a result of the Covid crisis.

Both the main housing policies announced by the Chancellor are not targeted at first-time buyers – so may have the effect of pushing prices further out of reach of those trying to get on the housing ladder.

First – the Tories have said the current Stamp Duty Holiday will be extended for several months. Far from bringing home ownership within reach, the policy has been credited with rocketing house prices. This tax break is available to everyone, not just first-time buyers. As a result, it has effectively handed landlords and second home owners half a billion pounds.

Second – a mortgage guarantee scheme is the other major housing policy in the package, allowing people to get mortgages of up to 95% of the value of a home. Yet again, it is not targeted at first time buyers, meaning that it has the potential to inflate house prices and push homes further beyond the affordability for many first-time buyers.

This budget shows, once again, that the Tories are the party of landlords and developers. They are not on the side of people who need a secure place to live.

It ignores the climate emergency

Insulating homes is key to making them warmer, more energy efficient and healthier. It is also a very effective way of reducing carbon emissions, cutting energy waste and creating jobs.

Sadly, the Chancellor’s statement failed to acknowledge these opportunities, or the urgency of the climate crisis. There was very little on climate change and almost nothing which could apply to the efficiency of homes.

This glaring absence follows the recent news that the government will cut the Green Homes grant, originally designed to spend £2 billion on improving the energy efficiency of 600,000 homes. It seems it will now improve less than a tenth of the target figure.

The collapse of this policy is a devastating U-turn, coming less than four months after the Prime Minister announced an extension to the scheme as a major part of his ’10 point plan’ for a green recovery.

The Green Homes grant was a step in the right direction. Instead of cutting it, the budget was an opportunity to make it bigger and more effective. Labour has repeatedly called for a £30bn green economic recovery to create 400,000 secure jobs in clean industries.

Using the Tories’ own phrase, it could have been a chance to ‘level up’ deprived areas. The average energy performance of homes is lower in deprived regions, particularly in rural areas. Many of these areas are crying out for jobs. A decent home retrofit programme could have solved all these problems.

It tries to hide the cladding scandal

Government inaction has turned a building safety problem into a full-blown crisis.

The response to the Grenfell Tower disaster has been piecemeal and ineffective. As a result, there are many thousands of people still living in flats wrapped in flammable cladding, almost four years later. Delays and uncertainty have paralysed a large part of the housing market.

So cladding campaigners have been waiting anxiously for details of the £3.5 billion fund to fix some safety defects in some buildings, which housing minister Chris Pincher promised would come in the budget.

Sadly, this was another broken promise. In the budget there was no mention of the fund, or the cladding crisis, nor building safety. This is incredible – and somewhat worrying – for a spending commitment of this size. Omitting it leaves huge numbers of people in limbo, unsure of whether their building will be covered. There are rumours and media reports that a lot of people will be excluded from this scheme. For some, this will mean financial ruin.

Labour will keep fighting for a fair solution to this crisis. Ignoring this injustice will not make it go away.

It won’t increase the number of homes

The UK has a shortfall of about 4.8 million homes, leading to high levels of homelessness, falling rates of home ownership among young people and high housing costs.

Investment in council housing is an essential part of the solution. It’s not just Labour saying this – this is also the position of Trade Unions, the Local Government Association, the Confederation of British Industry and Shelter. There was nothing in this budget to help councils to build more, in fact the budget for local government and housing is being cut.

There are empty homes and rental properties across the country which could be brought into the council or housing association sector. Many of them need urgent work to make them warm and dry, but again, there was nothing in the budget.

This is economic illiteracy – as well as building and retrofitting homes which people need, this would all create jobs and economic growth, which we badly need as we come out of this crisis.

It won’t confront the reasons people become homeless

While evictions bans are welcome, the government needs to address the underlying problem of high rents, precarious wages and reduced incomes for people with little savings or prospects of a new job in the current climate.

This week they have failed to do this and as a result hundreds of thousands of families are in difficulty. This is likely to put further strain on public finances if they become homeless and have to turn to councils for help. Yet councils are also under great strain and there was nothing for them to help with housing costs in the budget either.

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