Liberal Democrats housing pledge will generate jobs

11.27.00pm GMT Fri 29th Jan 2010

Mike Popham, prospective Member of Parliament has welcomed the Liberal Democrat's economic stimulus package that will, in the first year of the new Parliament, redirect £3.6bn of spending to create jobs and build up Britain's infrastructure. In years following this, similar amounts will be redirected to other Lib Dem spending priorities and to reducing the money the Country owes.

Mike said "Creating more jobs has to be our priority after a failed Labour Government and Tory Main Opposition has caused unemployment at 2.49 m and rising. I am particularly pleased that plumbers, plasterers, electricians, floor layers, housing staff in local authorities, removal, furniture shop, managing agent and water authority staff will all benefit from this initiative."

This comes from the Liberal Democrats plans to bring a quarter of a million empty homes back into use, making homes available for people who need them and creating 65,000 jobs.

There are over 760,000 empty properties across England which are no longer used as homes but can be brought back into use with some investment. People who own these homes will get a grant or a cheap loan to renovate them so they can be used: grants if the home is for social housing, loans for private use.

The plans form part of the economic stimulus package outlined as a core principle of the Liberal Democrat election manifesto. In the first year of the new Parliament, the party would redirect over £3.6bn of spending to create jobs and build up Britain's infrastructure. In the following years this money will be redirected to other Lib Dem spending priorities and reducing the structural deficit.

Liberal Democrat Leader Nick Clegg today launched the plans with Liberal Democrat Shadow Chancellor, Vince Cable and Liberal Democrat Shadow Housing Minister, Sarah Teather. Visiting the College of North West London, they met students on construction and engineering courses who would benefit from these new plans.

Commenting, Nick Clegg said:

"Allowing thousands of houses to sit empty when millions of families have been waiting years for a home is nothing short of a scandal.

"These plans are a clear example of where Liberal Democrat priorities lie: creating jobs and providing more family homes.

"The cost of bringing these homes back into use is just a fraction of the cost of build yet the Government is sitting idly by while they fall into disrepair.

"This is one element of our economic stimulus package that will generate jobs and help Britain on its way to building a fair, sustainable economy."

Notes to Editors

1. Creating more family homes

There were 1.8 m families on housing waiting lists in England in 2008. Yet the number of social homes has been allowed to fall by a million in the last decade. House building is unable to keep up with our growing need for housing but one in 30 homes (650,000 in England alone) is empty. The average cost to renovate them is £10,000 compared to £100,000 to build a new social home. It is also greener to renovate than build new.

2. Creating more jobs

Unemployment is 2.49 m and rising. The construction industry has been particularly hard hit, with predictions of up to 600,000 job losses in the sector. This plan forms part of the Liberal Democrats' economic stimulus and job creation package. In our first year in office we will redirect over £3.6bn of spending to creating jobs and building up Britain's infrastructure. In the following years this money will be redirected to other Lib Dem spending priorities and reducing the structural deficit.

We will allocate £1bn to grants to bring 100,000 homes into use as social housing. £400m will fund subsidised loans to bring 150,000 homes into use as private sector housing.

3. The Policy in detail

100,000 more social homes: Local authorities and Housing Associations will bid for a portion of the £1bn social homes fund. They will be responsible for allocating this money in the form of grants of up to £10,000 per property - individuals and local authorities will be able to top this up to do further work if they choose. The money will be used either to renovate their own homes or by allocating it to individual property owners.

Grants will only be given to private owners if the home becomes social housing for at least 10 years. This would be attractive: they will get guaranteed rent, and £10,000 of government-funded improvements on a property which was otherwise empty. Rents will be set according to the local reference rent and the managing agent will take a fee.

There will be an opt-out so that local authorities and individuals have the option of paying back the grant, with interest, and withdrawing from the scheme. Right to Buy would apply as it currently does to council homes but tenants would not have a Right to Buy privately-owned homes being used as social housing under this scheme.

150,000 more private homes: Local authorities will bid for a portion of the £400m Private Housing Fund to use as low cost loans of up to £10,000 for bringing empty homes back into use in the private sector. They will be responsible for allocating this money to individuals. Interest will only be charged on the loan at the rate of inflation, so there is no real-terms cost to the borrower. The presumption will be in favour of repayment over 10 years.

Jobs created: The 50,000 directly created jobs would include: Plumbers, plasterers, electricians, floor layers and housing staff in local authorities. The 15,000 indirectly created jobs would include: removal staff, furniture shop staff, managing agent staff and water authority staff. To calculate these figures we worked from an average of figures obtained from Housing Co-operatives on recent renovation work.

Funding: The economic stimulus package to create a fair and balanced economy with sustainable growth is funded by redirecting government spending. This includes removing Tax Credits from higher earners (£700m), scrapping the intercept modernisation program (£150m), restricting growth in the Train to Gain budget (£375m), scrapping the Child Trust Fund (£370m), cutting the Highways Agency Major Improvements Budget (£1,080m) and the introduction of a 10% banking levy (£1bn). In the first year of the new Parliament, the party would redirect this £3.6bn of spending to create jobs and build up Britain's infrastructure. In the following years this money will be redirected to other Lib Dem spending priorities and reducing the structural deficit.

Timing: The homes would have to be brought back into use within a year of receiving the loan and the money would be available in the first two years of a Parliament.