Philip Hammond has slapped down a Cabinet minister’s call for the Government to borrow billions to fund a housing boom.
On Sunday, Communities Secretary Sajid Javid said now was the time to borrow cash to help build the 300,000 homes a year the country needs to solve the housing crisis.
Sources then told The Sun Javid was hoping for a £50billion war chest from the Treasury to kick-start a building programme.
But asked to confirm if this was Government policy in the Commons today, the Chancellor said: “No.”
When asked by fellow Tory MP James Cartlidge if he would “resist the temptation” to fund new spending in the Budget “by billing our grandchildren”, Hammond replied: “It is not responsible to make so-called hard choices by loading the price on to the next generation and the generation after that.
“We have to make the difficult decisions and we have to bear the consequences of those decisions and at £65,000 per household our public debt in this country is still far too high so I can confirm to him that we will continue with the plans that we have announced to reduce the deficit in a measured and balanced way to ensure that debt is falling as a share of GDP.”
The comments come a day after the Prime Minister’s Official Spokesman refused to back Javid’s call to borrow to invest in housing, saying he would not comment on “Budget speculation.”
Javid made the call for extra cash during an interview on the BBC’s Andrew Marr Show on Sunday.
He said: “We are looking at new investment and I am sure at the Budget we will be covering housing.
“What I want to do is make sure we are using everything available to deal with this housing crisis and where that means, for example, where we can sensibly borrow more to invest in infrastructure that leads to more housing being built, and take advantage of some of the record low interest rates, I think we should absolutely be considering it.”
Liberal Democrat leader Vince Cable, who asked the Chancellor in the Commons if borrowing to invest was now Tory policy, said: “The government’s housing policy is in chaos.
“There was a brief shaft of light when we thought the Treasury had retreated from its stubborn refusal to finance public sector housebuilding through borrowing.
“But sadly Sajid Javid has been slapped down by the Chancellor, who denies all knowledge of the commitments that the Secretary of State made over the weekend.
“This is bad news for families struggling with soaring rents and younger people increasingly shut out of the housing market.
“We’re left with the absurd situation where councils can borrow from the Treasury to engage in property speculation on the other side of the country, but can’t borrow to build more housing for their own residents.”
Labour accused the Tories of rowing in public over the contents of the Budget - set to be announced on November 22.
Shadow Housing Secetary John Healey MP said: “It may be good spectator sport but it’s bad for the country when Conservative Ministers have their arguments in public.
“The Communities Secretary is publicly begging the Chancellor for more money because Tory cuts have forced new affordable housebuilding to a 24 year low.
“Only Labour has a proper plan to build 100,000 genuinely affordable homes a year and fix the housing crisis.”
While Javid’s call for extra cash seems to be falling on deaf ears, he is pushing on with an eight-week review into home buying – announced on Sunday.
That comes alongside another review into social housing – something described by Javid as “a wide-ranging, top-to-bottom review of the issues facing the sector”.