A controversial £3billion levy would blow a hole in the UK’s affordable homes revolution, British builders have warned.
New estimates from the Home Builders Federation (HBF) show that 75,000 homes targeting lower-income families could be scrapped due to the charge, which the industry argues ‘unfairly’ targets UK companies.
The organisation has expressed its concerns in a letter to Greg Clark, incoming Secretary of State for Levelling Up, Housing and Communities, The Mail on Sunday can reveal.
Warning: New estimates from the Home Builders Federation show that 75,000 homes targeting lower-income families could be scrapped
It wants Clark to reassess the proposal put forward in the wake of the cladding scandal by his predecessor Michael Gove, who enraged housebuilders by describing them as a ‘cartel’.
Foreign firms will avoid the tax, according to the letter.
‘Inevitably, the message conveyed by your predecessor was that if a company wishes to avoid its obligations and minimise its costs, it is best served by headquartering itself overseas or ignoring reasonable requests by Ministers,’ according to an extract of the letter seen by the MoS.
Housebuilders say they have already set aside billions to cover costs. The additional levy would damage their ability to fund future affordable housing projects. Stewart Baseley, executive chairman of the HBF, said the additional £3billion levy poses a ‘serious threat’ to business, jobs and housing supply.
He said: ‘Government must act to make other responsible parties pay their share and not take the easy option of targeting UK builders again for a problem they did not create.
‘Saying ‘it’s too hard’ to get contributions from other parties is unacceptable and an affront to UK businesses who employ hundreds of thousands and pay billions in UK taxes.’
Peter Truscott, chief executive of FTSE250 firm Crest Nicholson, told this newspaper: ‘As a sector, we’ve stepped up to the plate.
‘The thing that we are aggrieved about is the [£3billion] proposal that we should be funding buildings that we had absolutely nothing to do with, built by [companies] that either don’t exist anymore or are foreign domiciled.
‘If we are paying for that, then we are not paying for the new homes that people need.’ Another industry executive said: ‘It is not right that we are the only group that should be hammered because we are the only ones that the Government can get hold of and find.
‘The money isn’t free. It is a straight choice between the dividends paid to pension funds for UK citizens versus foreign domiciled property developers.’
The Government calculation for the £3billion figure has also been criticised, with one executive claiming it has been ‘plucked out of the air’.
David Thomas, boss of Britain’s biggest house builder Barratt Developments, wrote to Gove in May to express his ‘deep disappointment’ that the £3billion levy – originally aimed at firms building high-risk blocks – would now be industry wide.
He said the expansion of the levy would punish those ‘who were not responsible’ for the cladding scandal.
Gove tore up Government policy in January when he said developers should bear the full cost of fixing cladding and other defects in the wake of the 2017 Grenfell fire. He also threatened to shut out building firms that refused to contribute to a new building safety fund.
