Nov. 21 (Bloomberg) -- U.K. Prime Minister David Cameron will pledge to spend 400 million pounds ($630 million) on building houses in an effort to boost the economy and increase the supply of homes.
Cameron and Liberal Democrat Deputy Prime Minister Nick Clegg will today announce the plan to offer money to “shovel-ready” projects, according to a document setting out their new strategy. That will allow the construction of as many as 16,000 homes, including 3,200 for people on low incomes, they said.
The government is looking for cheap ways to stimulate growth after committing to eliminate the structural deficit by 2015 and as the economy grew 0.5 percent in the third quarter. The money will be aimed at construction projects stalled for lack of finance as housebuilding in the U.K. fell to its lowest level since the 1920s. The goal is for work to begin by July.
“Lenders won’t lend, so builders can’t build and buyers can’t buy,” Cameron and Clegg wrote in the foreword of the strategy document. “It is right for the government to step in and take bold action to unblock the market.”
Ed Balls, treasury spokesman for the opposition Labour Party, yesterday called on the government to spend immediately on infrastructure projects.
“The question is how much infrastructure can you bring forward at the moment?” Balls told Sky News. “You’ve got to get the economy moving now or else you end up with higher borrowing, higher debts and low growth and rising unemployment and that’s a terrible prospect.”
To contact the reporter on this story: Robert Hutton in London at firstname.lastname@example.org
To contact the editor responsible for this story: James Hertling at email@example.com