Cameron’s housing subsidy: who pays?
The Tory Chairman Grant Shapps got into a bit of a pickle on Sky yesterday trying to answer a question about the Tories’ housing policy changes, formally announced today. He was repeatedly asked: if there’s a 20 per cent discount on the housing being offered to under 40s who is paying for it?
Grant Shapps struggled to come up with the answer but the truth is this is not a conventional direct subsidy that will appear in the central government accounts.
The builders are being allowed a relaxation of building and planning regulations that reduces their costs as part of this special programme. They lose any requirement – known as a 106 agreement in the jargon – to provide social housing. They also lose the requirement to pay for transport infrastructure that links the new estate to other main roads and possibly other infrastructure requirements like sewage systems too – what is called the councils’ infrastructure levy or CIL.
Housing experts say they can’t be sure how many fewer social housing units would be built as a result of the first waiver but the number would be in the thousands.
On the face of it, the answer to the question “who pays?” for the 20 per cent “subsidy” could be “the local council.” Either that or the new estate will not have the sort of links that are normally required for new housing.
Housing experts I spoke to were pleased about the attempt to restrict sales to first time buyers who were going to live in the area for some time and the attempt to keep buy-to-let landlords out of the deal, though it’s not quite clear how the government would achieve the latter aim.
On a different note, rounding off his party campaign visit to Colchester where he was unveiling the housing scheme, the PM tried out a line we’ll probably be hearing more and more in the weeks ahead.
He told his audience that there was one thing worse than an Ed Miliband government and that was an Ed Miliband government propped up by the Scottish Nationalists. It is a line that can only fuel English nationalism you might think and therefore feed Scottish nationalism too.
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