George Osborne is under growing all-party pressure to boost housebuilding to kickstart the economy

Labour is expected to fight the 2015 election on a pledge to bring in a huge housebuilding programme

George Osborne is under growing all-party pressure to boost housebuilding to kickstart the economy and create jobs after his March Budget was criticised as a missed opportunity to tackle the housing crisis.

The Chancellor is being urged to use his government-wide spending review in June to give the go-ahead to the building of up to 100,000 council and housing association homes to complement the help for home-buyers he announced in the Budget. Critics say he needs to increase the supply of homes as well as demand through the mortgage market.

The pressure increased after new figures showed that 2m council houses and flats have been sold since Baroness Thatcher introduced her flagship “right to buy” policy in 1980 – the same number of people now on local authority waiting lists for housing. Lord Oakeshott, the Lib Dem peer who obtained  the figures by tabling questions in the Lords, said: “The Thatcherite council house sales  crusade won the Tories millions of votes and costs taxpayers  billions of pounds. It's imprudent housekeeping at its worst to flog off our social housing stock at taxpayer-subsidised discounts and then pay out £20bn a year to private landlords in housing benefit, often on the same resold properties.”

He added: “Social housebuilding has now almost ground to a halt. We must rebuild it by lifting the ban on councils borrowing to build, and guaranteeing institutional investment in housing association building on a massive scale. Or our economy will stay stagnant  and 2m families will languish in housing need as Lady Thatcher's worst legacy.”

Lib Dem activists called at the party’s spring conference for an extra 100,000 council and housing association homes and Lib Dem ministers including Vince Cable, the Business Secretary, are sympathetic. Mr Cable sees the move as part of what he has described as a “Plan A plus” – sticking to the Coalition’s deficit reduction plan but taking bolder action to secure growth.

Figures published on Thursday will show whether Britain slipped into a “triple dip” recession in the first three months of this year. Although City analysts predict that Mr Osborne will narrowly avoid that embarrassing fate, they believe the economy is still flatlining  and Lib Dems argue that more housebuilding would give it an immediate shot in the arm.

Labour is expected to fight the 2015 election on a pledge to bring in a huge housebuilding programme. Ed Balls, the shadow Chancellor,  has called for the proceeds of the 4G mobile phone spectrum to fund the building of 100,000 affordable homes. The £2.3bn proceeds will be spent by 2015 so Labour may finance such a promise by higher borrowing.

Mr Osborne used his Budget to announce a £3.5bn Help to Buy scheme to help people buy new homes with a five per cent  deposit and to guarantee another £130bn of new mortgages. But the independent Office for Budget Responsibility (OBR) said the measures would do little to boost the construction industry and were likely to inflate property prices, sparking fears of another housing bubble.

The cross-party Treasury Select Committee described as “unconvincing”  the Chancellor’s assertion that his measures would trigger an increase in the supply of homes. It has demanded replies to 19 unanswered questions about them.  Andrew Tyrie, the  committee’s Tory chairman, said: “The Government’s Help to Buy scheme is very much work in progress. It may have a number of unintended consequences. Without further detail it is not possible to estimate its effects. The questions the committee has asked the Government need answering.”

Policy Exchange, which is regarded as David Cameron’s favourite think tank, is pressing the Government to increase housebuilding and expressed alarm that the number of housing starts fell by 11 per cent to 100,000 new homes last year.  It fears that the Coalition is on track to see the lowest level of housebuilding since the 1920s.

The Office for National Statistics (ONS) revealed last week that home ownership has dropped for the first time in almost 100 years as people struggle to get a foot on the housing ladder. The number of owner-occupiers rose to a record 69 per cent but fell back to 64 per cent in 2011. The number of people renting their homes rose from 31 per cent in 2001 to 36 per cent in 2011  as many found themselves trapped in the rental market.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA celebration of British elections
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Marketing Manager (B2B) - Romford - £40,000 + car

£35000 - £40000 per annum + car and benefits: Ashdown Group: Marketing Manager...

Ashdown Group: Helpdesk Analyst - Devon - £20,000

£18000 - £20000 per annum: Ashdown Group: Helpdesk Analyst - Devon - £20,000 ...

Ashdown Group: Data Scientist - London - £50,000 + bonus

£35000 - £50000 per annum + generous bonus: Ashdown Group: Business Analytics ...

Ashdown Group: IT Project Coordinator (Software Development) - Kingston

£45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power