Sunak Faces Calls to Boost Housing Supply After Election Loss

Kitty Donaldson and Alex Wickham

Tue, 9 May 2023 at 5:00 am BST

(Bloomberg) — Prime Minister Rishi Sunak is facing new calls to promote home building after the UK’s housing crunch was blamed for contributing to the Conservative Party’s widespread losses in local elections.

MPs both in the ruling party and in the main opposition Labour Party have renewed criticism of Sunak’s decision to scrap requirements for local authorities to build 300,000 homes annually in the wake of the election Thursday. The Conservatives lost more than 1,000 council seats and Labour, which backs targets, became the largest party in local government.

Labour leader Keir Starmer is now mulling additional policies that would boost the market for local homebuyers, Lisa Nandy, the party’s spokeswoman for housing policies, said Monday. Labour is considering reserving some sales in new developments to first-time UK buyers and banning overseas residents from purchasing more than 50% of homes in a project, Nandy said.

Separately, Simon Clarke, a Conservative MP previously responsible for “leveling up” underperforming communities, said the decision to withdraw the targets was a “major mistake” that played a significant role in the party’s defeat. “One aspect of policy that does need to change and change as a matter of urgency is our housing policy,” Clarke told BBC radio Monday.

The housing debate cuts to the heart of Sunak’s political challenge as he prepares for a general election amid deep internal divisions that tie his hands politically. While housing targets are popular among northern voters who helped former Prime Minister Boris Johnson increase the Conservative majority in 2019, they face opposition in southern communities worried about overdevelopment.

Sunak scrapped the targets shortly after taking office in October, one of several efforts to consolidate power after the back-to-back resignations of Johnson and former premier Liz Truss. But the move did little in last week’s elections to prevent the Conservatives from losing southern seats to the Liberal Democrats while northern voters returned to Labour.

The results suggest that Labour could become the largest party in a national vote that must be held by January 2025. Sunak is similarly facing growing calls from Conservatives for a tax cut to help renew waning enthusiasm for the ruling party after 13 years in government.

The prime minister indicated Monday that he would stick to his “five pledges” for the year, which prioritize halving inflation over tax cuts. “I know that’s not going to happen overnight but we’re going to strain every sinew to do exactly that,” he told reporters in Hertfordshire.

Sunak’s Tories Suffer Stinging Rebuke in UK Local Elections

Although Sunak would likely face public criticism from some within the party, most recognized the need for discipline to stand a chance in the election, said three Conservative MPs, who requested anonymity to speak about internal discussions. They dismissed any chance of a leadership challenge after the party cycled through five prime ministers since taking power in 2010.

Still, he could be forced to beat back a no-confidence motion in the House of Commons this week, which the Liberal Democrats intend to bring. While Sunak’s majority will easily overcome the challenge, the debate will allow the smaller party to tout its local election wins.

Labour, meanwhile, has seized upon the housing issue as a way to draw a contrast with the Conservatives. Starmer has said that he wants to make Labour the “party of homeownership” and increase the homeownership rate to 70%.

“The Conservatives have abandoned first-time buyers,” Nandy, the Labour housing spokeswoman, said in a statement. “It cannot be right that on their watch, overseas investors have been allowed to sweep in and buy up housing before hardworking local families and first-time buyers get a look in.”