Coalition 'sowing seeds of confusion and preventing investment'

Dithering and delays in government delivery mean that a lack of clear regulation are preventing investment and stopping work from beginning, he claimed.

Lucas was speaking at a Labour conference fringe event, 'Construction: Building Our Future', hosted by the National Federation of Builders (NFB) and chaired by Lydia Stockdale of Inside Housing.

Alison Seabeck, the shadow housing minister, accused the chancellor of not working in tandem with his colleagues.

"You have the chancellor's desire to drive a coach and horses through planning in the interests of growth, set against confused planning ministers' desires to see localism work and enable local people to shape their communities," she said.

Former housing minister Nick Raynsford accused the government of creating a perverse incentive to knock buildings down rather than repair, pointing to a VAT level of 20 per cent for repairs that do not apply to new builds.

Chris Williamson, shadow localism minister and former bricklayer, said Labour's record in local government was getting stronger.

"Local authorities like Sunderland are providing mortgages and that can help stimulate the local market," he said.

The NFB's chief executive, Julia Evans, reminded attendees that new construction orders were at their lowest in 30 years.

With mortgage availability now at 50 per cent of 2007 levels, and the lowest number of houses being built in the UK since the 1920s, a worrying picture of a beleaguered construction sector has emerged.

"This is a huge issue because we're sitting on a potential geyser of demand in the housebuilding sector," she said.