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Labour puts SMEs at the heart of new housing policy

The Labour Party has set out plans to increase competition in the housebuilding sector by boosting the number of homes built by SMEs.

In her first keynote address since she became shadow housing minister in October, Emma Reynolds launched Labour’s ‘build first’ policy in front of a National House-Building Council audience on Monday.

Labour wants the ‘build first’ policy to encourage more competition in construction by boosting the number of homes built by small and medium-sized companies.

Ms Reynolds said: “We must introduce greater competition and diversity if we are to increase output, driving innovation and improving quality.”

But she added that large housebuilders still have a role to play in delivering Labour’s 200,000 homes a year minimum build target, pledged by Ed Miliband last year.

She said: “We need a thriving building sector. That means our big-volume housebuilders have an essential role to play.”

The shadow housing minister added that up to 230,000 construction jobs could be created by SME housebuilders and that self-build should play a larger part in the UK’s future housing mix, after self-build rates fell last year to the lowest levels in 30 years.

Ms Reynolds confirmed that a Labour government would require local authorities to include a larger proportion of small sites in their five-year land supply and added that smaller firms and custom builders would be given guaranteed access to any public land released for housebuilding.

New towns and garden cities will also be a continued focus for Labour’s housing policy.

She highlighted comments made by shadow chancellor Ed Balls last November, in which he said a Labour Treasury would provide financial guarantees for housebuilders looking to build new towns.

Asked to comment on wider concerns in the housebuilding industry such as skills shortages, Ms Reynolds said the industry had a shortage of apprentices.  

She said she was working with shadow business secretary Chuka Umunna to develop a new programme to increase apprenticeships.

Ms Reynolds said that her party wanted to get to a stage where housing competition was driven by the “quality of the product”, rather than land values, which she believes has been too great a focus for housebuilders to date.

FMB chief executive Brian Berry said: “Any political party serious about tackling the housing crisis needs to get small housebuilders back into the market.

“Two barriers are preventing this from happening: lack of access to finance and lack of access to land. Until these two issues are addressed, small builders will not be able to build the number of new homes that are urgently needed to solve the housing crisis.”

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