U.K. Liberal Democrats Seek Extra Borrowing for Homes

July 13 (Bloomberg) -- The U.K. Liberal Democrat party will call for local authorities that want to increase their borrowing in order to build more homes to be allowed to take up the unused loan capacity of other districts.

Business Secretary Vince Cable will set out the idea today in a speech in Manchester, northwest England. He’ll say that local government isn’t using 2.8 billion pounds ($4.3 billion) of the borrowing capacity allowed it by central government, because some councils are opting not to build.

“Councils which want to borrow and build should be allowed to use unused borrowing limits from councils which didn’t wish to utilize theirs,” Cable will say, according to his office. “It is a modest step, but it opens up the possibility of sensible public borrowing to revive the depressed construction industry and to meet desperate housing need.”

The business secretary will argue that it’s the “dogma” of his Conservative coalition colleagues that’s preventing the rule change. “Even though freeing up this borrowing space would result in tens of thousands more homes being built, and many times more jobs, they would rather start talking about the cuts they want to make, rather than the houses that we should build,” he’ll say.

To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net