Exclusive: Minister lets slip homes scheme ‘incoherent and unfair’

In unguarded comments at the Liberal Democrat conference in York, Local Government Minister Stephen Williams admitted the ‘New Homes Bonus’ has no real impact on the number of new homes being built in Britain.

Amongst a raft of criticisms of his department during a fringe event for Lib Dem members, Mr Williams branded another key policy – preventing authorities from raising council tax by more than two per cent – as “absurd”.

Damningly for the Government, the Minister also admitted the smallest councils will “undoubtedly” face “severe financial difficulty” over the next few years due to the cuts handed out by his own department, raising questions about their “viability”.

The Lib Dem went on to describe one of his Departmental colleagues, Tory Planning Minister Nick Boles, as “hyperactive” and “hated by many Tory MPs”. And he joked that being compared to Secretary of State Eric Pickles was “the most grievous possible insult” he could deliver.

Mr Williams, who was appointed to his post last year, said in a statement last night the policies he attacked were Conservative ones.

The row is just the latest in a series of public disputes between the two governing parties.

Launched in 2011, the New Homes Bonus offers grants to councils based on the number of homes built locally, and is cited by Ministers as one of the main ways the Government is seeking to increase housebuilding.

But Mr Williams said: “The New Homes Bonus – speaking freely as a Lib Dem MP – I’m not a fan of. I don’t think it’s an incentive, necessarily, for local authorities to give planning permission. I don’t think it’s actually driving decision-making on the ground.”

Many districts, he said, are unable to host much extra housing for geographical reasons. “It’s not a fair opportunity,” he added.

He also dismissed his department’s insistence that authorities raising council tax by more than two per cent must hold a referendum. “A referendum on tax rises is absurd,” he said. “If we had it for income tax, VAT, then the country would probably grind to a halt.”

Town halls, he said, should actually have far more fiscal power.

“Why shouldn’t we generally provide that local government can set new taxes, possibly across a range of areas?” he asked.

“You could have a genuine ‘bedroom tax’ on hotels, for instance, in major tourist areas – seaside towns, and cities like York. The city council would have done very well out of us this week if there was a £1 tax on every room. That’s where I want us to get to.”

The Minister offered a bleak assessment of the impact his department’s cuts are having.

“Some district councils, because of the fall in central Government grant, are undoubtedly going to get into severe financial difficulty – and viability questions will probably be asked over the next two to three years,” he said.

Planning policy, he added, was “constantly changing” under the Coalition. “(Planning Minister) Nick Boles is hyperactive in that area – which is good in a way,” Mr Williams said. “He’s hated by a lot of Tory MPs – but he’s quite a good colleague to work with in that he’s thoughtful, he’s creative, he knows his stuff.”

A spokesman for Mr Williams said last night: “The New Homes Bonus and the council tax referendum threshold were Conservative priorities we agreed to when going into Government.

“During conference Stephen received many representations from Lib Dem councillors about the effect of these policies. He was simply saying these policies should be looked at in the party’s 2015 manifesto.”