The Budget: Chancellor George Osborne unveils scheme to build tens of thousands of homes
Plans for tens of thousands of new homes have been unveiled by George Osborne with the development of a garden city on the Thames estuary and a £6 billion extension of the Government's Help to Buy scheme.
Speaking ahead of his Budget on Wednesday, the Chancellor said Britain needed to "get building" to ensure working families currently priced out of the property market were finally able to buy a home of their own.
At the same time, however, he rejected calls from some Tories to ease the pressure on middle income earners by taking action to reverse the growing numbers being caught by the 40p higher rate of tax.
Mr Osborne said that a major expansion of housebuilding would help to secure the recovery as the economy continued to gather strength.
He said that he was extending the equity loan element of Help to Buy, covering new-build homes, for an additional four years to 2020 - providing support for the construction of 120,000 more properties.
And he announced that Ebbsfleet in Kent - on the high speed rail link to the Channel Tunnel - had been chosen as the site of the Government's promised new garden city with a further 15,000 homes.
"This means more homes, this means more aspiration for families, this means economic security and economic resilience because Britain has got to get building," he told BBC1's The Andrew Marr Show.
"Families who today may be in good jobs, they simply cannot afford to buy a house. I am not, as the Chancellor prepared to let that rest."
The measures were dismissed as a "damp squib" by shadow chancellor Ed Balls who warned that unless the action was taken to curb the mortgage guarantee element of Help to Buy, it would simply serve to stoke property prices.
He said that taxpayer support for home-buyers should be restricted to properties worth less than £400,000 rather than £600,000 at present.
"We've got the lowest level of house-building since the 20s," he told BBC Radio 5 Live's Pienaar's Politics.
"The Government is not doing enough to invest in affordable homes and the economics of this is if you boost demand with Help to Buy and don't do enough on supply, the price goes up, it's harder to get into the housing market, the economy becomes more unbalanced and the cost of living crisis gets deeper.
"If George Osborne really wants to make a difference he would have been much more radical on house-building in the last three years and today - and he's not been; it's a damp squib."
Mr Osborne also squashed demands by Tories like former chancellors Lord Lamont and Lord Lawson to start taking middle income earners out of the 40p band.
An estimated 4.4 million people now pay the 40p rate, compared with three million in 2010, and with the threshold of £41,450 due to rise by just 1% this year - below the rate of inflation - many more will soon be caught.
The Chancellor, however, said that it was still his priority to lift more people out of taxation altogether through raising the personal allowance - which is widely expected to see a further rise to £10,500 in the Budget on Wednesday.
He made clear his irritation at Liberal Democrat attempts to claim the credit for the policy, which he said had been fully supported by the Conservatives in the coalition, and which benefited those on middle incomes and well as those at the bottom of the income scale.
"My priority has been to increase the personal allowance. That is what I have done in budget after budget. What that means is, yes, you are taking the low paid out of tax - which has been a long-standing Conservative ambition - but you are also helping those on middle incomes," he said.
"It is only people right at the top, people on incomes of over £100,000 who don't get the benefit. I think it is a very effective instrument for making sure that hard-working people keep more of their money and I am very proud to be part of a Government that has delivered that."
Lord Lamont said that one in six taxpayers now fell into the 40p compared with just one in 20 when it was first introduced by Lord Lawson in 1988, with the total set to hit six million next year.
"You cannot go on for ever and ever increasing the personal allowance and not increase the 40% tax threshold because you are just drawing more and more people into that band," he told BBC1's Sunday Politics.
Belfast Telegraph Digital