Labour leadership candidate Ed Balls has called for a reform of housing policy which would see £6bn pumped into affordable housing and VAT slashed for home repair, maintenance and improvements.
In an article published on the Labour List website today, the Shadow Children and Education Secretary says the moves could be funded by the fact public finances are around £12bn healthier than originally forecast in the March Budget. The Government has earmarked this money to lower the deficit.
He says: “By using half of that £12bn, a £6bn investment this year and next, we could build 100,000 extra affordable homes which it has been suggested would create up to 750,000 jobs, directly in the construction industry and indirectly in the supply chain”.
Balls says a temporary 5 per cent level of VAT should apply to the repair, maintenance and improvement of housing. He says evidence from other countries suggests such a move could increase tax intake.
Figures released by the Office of National Statistics last week showed an increase in construction output. However, Balls says: “They are a misleading guide to the future: they included businesses catching up with work after the bad winter and they were buoyed by Labour’s public sector building programme, which the coalition has now slashed”.
Balls says Labour needs to admit where it went wrong. He says: “The truth is that whilst we made progress, Labour leaders over several decades never paid enough sustained attention to housing to make it the priority it deserved. That must change.”