Hammond shuts down Javid's plan to borrow billions at record low rates

Philip Hammond has slapped down communities secretary Sajid Javid's proposal to borrow billions of pounds at current interest rates to build homes.

Speaking at the weekend, Javid made the case to "sensibly borrow more... take advantage of some of the record low interest rates" for housing, as well as other infrastructure needs such as the so-called Oxford-to-Cambridge corridor.

But asked to confirm if this was Government policy in the Commons today, the chancellor said: “No.”

Asked if he could “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.”

Yesterday the Prime Minister's spokesman refused to respond to Javid's suggestions, saying he would not comment on “Budget speculation.”

But while some Tories might approve of Hammond's dedication to reducing the deficit, political opponents stressed the need for the government to solve the housing crisis.

Septuagenarian Liberal Democrat leader Vince Cable said: “There was a brief shaft of light when it seemed the Treasury had finally agreed to finance public sector house building through borrowing.

“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

Full story: Hammond shuts down Javid's plan to borrow billions at record low rates: City A.M.