MPs urge Philip Hammond to lift restrictions on local cash for housebuilding
Philip Hammond must lift restrictions on councils and let them borrow as much as they need to meet government housebuilding targets, an influential committee of MPs has declared.
The Treasury Select Committee said the borrowing cap for local authorities should be scrapped to give them a chance to build the 300,000 homes a year ministers have promised.
In his Autumn Budget the Chancellor raised the cap for councils in especially expensive areas by £1bn - but in a unanimous verdict the MPs on the committee said the building target will still go unmet without bolder change.
Publishing a new report, committee chair and Tory MP Nicky Morgan said: “The Chancellor pledged to ‘fix the broken housing market’, but the Government is going to find it very difficult to meet this ambition.
“The increase in the cap on borrowing for local authorities to build homes is a step in the right direction, but it doesn’t go far enough.”
She added: “To achieve the Government target of 300,000 new homes per year, the cap should be abolished. The potential of local authorities to build should be unleashed.”
The Government has already rebuffed calls by the Communities and Local Government Select Committee to remove the borrowing cap for all councils.
But the Labour party voted at its conference last year for a future administration run by the party to lift the caps.
The new Treasury Select Committee report also concluded that the cut in stamp duty for first time buyers - also announced at the Autumn Budget - will help those buyers rather than existing homeowners, as warned by critics.
Elsewhere, it called on official Government forecast body the OBR to do a special forecast about the expected impact of Brexit on economic growth.
And it urged the Treasury to publish an assessment with every Budget looking at how new measures will affect equality in the UK.