He’s going to work up a fair old sweat doing that

Jeremy Corbyn ‘would build 1m new homes’ in five years of Labour

And this is almost Ritchie like, isn’t it?

A Labour government run by Jeremy Corbyn would borrow £15bn a year to build houses across the country – half of them council homes – as part of a £500bn programme of public investment, new policy papers have revealed.

It would aim to build one million homes during a five-year parliament and guarantee housing tenants – especially those in the private sector – new safeguards, including secure three-year contracts and protection from “unreasonable rent increases”.

Despite the huge sums, Corbyn’s team insists that government borrowing will be “highly efficient” and a good deal for taxpayers because of the boost to the economy from construction, job creation and rental income.

The documents, released by the Corbyn campaign as it seeks to fend off the challenge to his leadership by Owen Smith, say that the net cost to the public sector will be £10bn a year, because two thirds of the construction bill would be labour costs, meaning extra tax revenues for the Treasury.

Govt spends £100 billion a year, net cost £10 billion a year. So, err, marginal tax rates on labour are 90% these days, are they?

If anyone can find this document it would be interesting to see how they’re going to do this in more detail.

14 thoughts on “He’s going to work up a fair old sweat doing that”

  1. Govt spends £100 billion a year, net cost £10 billion a year. So, err, marginal tax rates on labour are 90% these days, are they?

    Under a Corbyn-led Labour government, they would be.

  2. Bloke in North Dorset

    Lets assume the Civil Service gets sight of the detailed plans, its still going to take 3 months to mobilise them after a general election. Lets also assume that they have some rough idea where they will build these homes*, if they really mean houses the problem will be even harder as that rules out multi-tenanted units.

    Two years to do design work and get planning permission. This is where the left in particular and politicians in general fail to understand the laws that they have introduced. Planning law is just that, planning law, and it is very much a locally controlled process and jealously guarded by local authorities.

    I assume being the left they think that they will just be able to change the law and ride roughshod over local objections, but even if that’s a manifesto commitment there’s going to be a lot of opposition so its still likely to take 2 years.

    Then there’s at least 3 months to mobilise the industry, probably nearer 6. We don’t have the resources to build that many buildings and the associated infrastructure in parallel so it will involve importing equipment, materials and, shock horror, labour.

    So at best we’ve got 2.5 years to build 1m homes and all the infrastructure that will be needed to support them: sewers, electricity, gas, water, roads, schools, hospitals …

    Fucking delusional.

    There’s going to be some very rich consultants and builders at the end of 5 years and precious few homes.

    * Every time this comes up we keep hearing about brownfield sites. When I ask where they are nobody knows and its the worlds best kept secret by the building industry.

  3. Tim,
    Half the homes will be built by the private sector, so they cost the government nothing and it pockets 20% of the construction (not land) cost (Income tax and NI makes up 40%-ish of two-thirds). It pays 80% of the construction cost of the council housing.
    There are two ways of reading the text – the more plausible is that Corbyn spend £15bn gross on housing but only £10bn net which implies that the private sector builds as many houses for £10bn as the public sector does for £15bn so a private sector house costs £100k to build but a public sector one costs £150k. In what the government invests the other £85bn a year is hidden from our sight.
    The alternative reading means that public sector houses will cost £1m each

  4. Presumably getting from £100bn down to £10bn also includes the rent received from the tenants, although once you take out housing benefit and those that don’t pay a lot of that will disappear.

  5. Well, give him one point for recognising a major problem. But since Labour are struggling to organise their own conference at the moment I have zero faith in their ability to solve it.

  6. With base rates at 0.25% it should be simplicity itself for any entity to borrow to fund construction of a revenue stream.

    This is about contructing a revenue stream to pay off the build costs, isn’t it? Y’know, borrow £100bn, pay off £130bn over 25 years, use it to generate in income stream to pay that £130bn. Y’know, standard capital investment to generate revenue.

  7. Does the same logic mean that governments should run farming, because there are agricultural subsidies and red diesel, and some farmers make a profit. Or that governments should run supermarkets because 0% VAT is a subsidy to their retail prices, and tax credits subsidies their staff wages.

  8. Sorry, my numbers are wrong because I changed NI to include employers’ NI while typing the post and failed to make the consequential changes. Govt. claims back c.25% of construction cost of both types of housing so as to reduce £15bn to £10bn, total construction cost of houses is £20bn and the private sector builds as many houses for £5bn as the public sector does for £15bn.

  9. Bloke in Costa Rica

    Bloke in Cyrpus: ~548 a day, but yes, it’s ridiculous. 23 an hour. One every 160 seconds for five years.

Leave a Reply

Your email address will not be published. Required fields are marked *