Overall, I think the Budget contains some helpful measures to help families with the cost of living, and it invests in the future of our economy within a responsible framework. As a Liberal Democrat, I am naturally proud of the rise in the personal allowance to £10,000 from April 2014—one year earlier than planned—which will give 24.5 million people a tax reduction of £700. I was also pleased at the introduction of the employment allowance, particularly for small and medium-sized enterprises. My constituents will certainly be pleased with the freeze in fuel duty, the scrapping of the beer duty escalator and the cut in duty on beer.
I wish to concentrate in my short speech on the overall £5.4 billion boost to housing, but I will make a slight digression to talk about child trust funds— I should declare that I am a grandparent with a granddaughter who has a child trust fund. I have received a number of representations on those funds recently, and I have been sent details from a campaign by Money Mail under the headline:
“The £34,000 curse of child trust funds: Six million children are barred from best savings deals”.
One could interpret that as stating that the next generation of young people might be deprived of a deposit for a house, and at the other end of the scale, for lower income people, there are clearly children with trust funds who are not receiving the levels of interest that they should in terms of equity. I wanted to raise that issue with my right hon. Friend the Chief Secretary to the Treasury who is sitting on the Front Bench.
The housing package is part of building a stronger economy and a fairer society, and includes a number of measures to support home ownership, new development and affordable housing. Over the past year or so, there has been agreement across the House that stimulating the construction sector is key to stimulating growth. It is a win-win situation with more jobs and more money created for our economy, without particularly sucking in imports. It is estimated that each extra home built each year creates jobs for three to four construction workers and those in associated industries, thereby improving business confidence.
During previous debates we have identified issues on the demand and supply sides of the housing market, and many have argued that the problem is not with planning as such. On the demand side, measures in the Budget have the potential to extend the supply of new houses, perhaps converting some of the hundreds of thousands of non-implemented planning applications into homes. Meeting the needs of those willing and able to buy, and the aspirations of those wishing to be home owners, is important, and will give this generation the same opportunities as my generation. At times tonight I have wondered whether the Labour party actually believes in encouraging home ownership.
Of course, home ownership is not the whole solution to our housing problem. I represent an area—Purbeck—that has a very high house-price-to-wages ratio and a high proportion of second homes. Although I am keen on the two schemes to stimulate mortgages, I am not keen on them subsidising second homes as that would make the situation in Purbeck and Dorset even worse. I like both schemes, however, because they involve first-time buyers and second steppers, and I think that we must put a shock through the whole market.
But—and there is a but—I think we have to do a lot more. I like the buy to rent stimulus, but we need to increase the supply of affordable housing over and above what we want to do and have done already. In the next phase we ought to look at the capacity of councils to borrow money for building housing, at direct building by councils, and at supporting arm’s length management organisations, which is incredibly important. An ALMO in my constituency is ready to start building but cannot get the borrowing capacity.