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Labour unlikely to lift housing borrowing cap

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Shadow housing minister Emma Reynolds has indicated Labour would not lift the Housing Revenue Account borrowing cap, for fear opposition parties would use such a policy as a means of attack.

During a fringe debate on housing at the Labour party conference in Manchester, Ms Reynolds said the party aimed to build 200,000 homes every year by the end of the next parliament.

That prompted Sharon Taylor, leader of Stevenage BC, to urge Ms Reynolds to “lift the housing borrowing cap so councils can get on with building”.

Ms Reynolds said she could “hear calls…about [lifting] the cap” but added shadow chancellor Ed Balls had already made it clear a Labour government would have to operate in a “difficult fiscal environment”.

As a result, she indicated a policy to lift the borrowing cap would not be included in the general election manifesto because of “the pressures we will be under” to convince voters Labour could be trusted on the economy.

“We have to be aware of what the opposition will say and how they will frame that [lifting the HRA borrowing cap] at the next general election,” she said.

Responding to that, Tony Newman (Lab), leader of Croydon LBC and spokesman on housing for the LGA, said: “I think we have got to be bolder as a party. This is not borrowing; you won’t get a more secure investment than new builds.”

Ms Reynolds said the party was “in favour of giving councils the potential to build even more homes”. She added: “We have made it clear housing investment will be a priority for the next Labour government.”

She said councils, but combined authorities in particular, should consider working together “to set up new homes corporations … where they can proactively sell the land and go out to the market and get developers to build on that land rather than sitting back and saying: ‘Here’s the land, we want you to build on it but this is where our role ends’”.

Ms Reynolds said such corporations could “speed things up, especially large scale developments, and deliver them at pace”.

Shadow communities secretary Hilary Benn said in his speech earlier in the day that Labour would work with local authorities “so they can build more council houses”.

Meanwhile, Ms Reynolds said she thought the rent-to-buy model “should be more widespread and we should encourage it more”. Asked whether a future Labour government would scrap neighbourhood plans, she said Labour viewed these plans “positively”.

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