16 Mar 2014

George Osborne unveils 15,000-home garden city

A new garden city is to be built in Ebsfleet in the Thames estuary, and the government’s help to buy scheme is to be extended until the end of the decade, Chancellor George Osborne announces.

Speaking ahead of his budget speech on Wednesday, Mr Osborne said that Britain had to “get building” with the construction of tens of thousands of new homes in the coming years.

The development of a garden city at Ebbsfleet in Kent will initially provide 15,000 homes while the extension of help to buy for new properties – which had been due to end in 2016 – to 2020 will support the building of 120,000 additional homes, he said.

“This means more homes, this means more aspiration for families, this means economic security and economic resilience because Britain has got to get building,” he told BBC1’s The Andrew Marr Show.

Mr Osborne said that the development of Ebbsfleet – on the high speed rail link to the Channel Tunnel – would build on the example of developments such as Letchworth, Welwyn Garden City and Milton Keynes.

“There is the land available. There is fantastic infrastructure with a high speed line, it is on the river, it is in the south east of England where a lot of the housing pressure has been,” he said.

‘Britain has to up its ambition’

“It will be a proper garden city. It is not something this country has attempted for decades. That is one of the messages of my budget. Britain has to up its ambition, Britain has to up its game, Britain has to earn its way in the world. Yes, the economy is recovering but that is not enough. We have got to finish the job.”

Shadow chancellor Ed Balls said the help to buy announcement was a “damp squib”.

He told BBC Radio 5 Live’s Pienaar’s Politics: “I think the help to buy scheme, for a period of time, is a good thing.

“I am surprised (Mr Osborne has) extended it without any reference to the governor of the Bank of England to 2020, because he told us he was going to get the governor of the Bank of England to review the scheme.

“I’ve said to George Osborne on the details of the scheme first of all, why are we having a taxpayer guarantee for people buying homes for £550,000, £600,000 – that should come down to less than £400,000. Maybe he will do that in the budget.”

‘Lowest level of house building’

Asked if helping people with new-build properties was a good thing, Mr Balls said: “We’ve got the lowest level of house-building since the 20s.

“The government is not doing enough to invest in affordable homes and the economics of this is if you boost demand with help to buy and don’t do enough on supply, the price goes up, it’s harder to get into the housing market, the economy becomes more unbalanced and the cost of living crisis gets deeper.

“If George Osborne really wants to make a difference he would have been much more radical on house-building in the last three years and today – and he’s not been, it’s a damp squib.”

Mr Osborne signalled that Tories – like former chancellors Lord Lamont and Lord Lawson – who have been pressing for him to reverse the increasing numbers of middle earners being caught by the higher 40p rate of tax would be disappointed.

The chancellor said that it was still his priority to lift more people out of taxation altogether through raising the personal allowance – which is widely expected to see a further rise to £10,500 in the budget on Wednesday.

He made clear his irritation at Liberal Democrat attempts to claim the credit for the policy, which he said had been fully supported by the Conservatives in the coalition, and which benefited those on middle incomes and well as those at the bottom of the income scale.

“My priority has been to increase the personal allowance. That is what I have done in budget after budget. What that means is, yes, you are taking the low paid out of tax – which has been a long-standing Conservative ambition – but you are also helping those on middle incomes,” he said.

“It is only people right at the top, people on incomes of over £100,000 who don’t get the benefit. I think it is a very effective instrument for making sure that hard-working people keep more of their money and I am very proud to be part of a government that has delivered that.”