Call for house builders to be nationalised

Nationalise the big house builders – that’s the latest call from senior Labour MPs.

Having seen banks rescued as a result of government money, a group of Labour backbenchers, former ministers and left-wing pressure groups have sensed that the time is ripe to press for house builders to be seized, something that would have been close on heresy a year ago.

What would the cost be?

Well, shares of the big names such as Taylor Wimpey, Persimmon and Barratt are worth only a pittance compared with their value 12 months ago, the most dramatic collapse being felt by Taylor Wimpey where share prices are down from a figure of 520p just 18 months ago, to 11p now.

The Financial Times ran a story over the weekend showing that the case for wholesale nationalisation is being led by John Cruddas, the man who recently declined the post of housing minister.

The piece in the FT reports: “Many influential Labour voices believe the government could benefit from taking a greater role in the industry.

“This could save thousands of jobs and solve the shortage of social housing at a relatively low cost.

“It would also enable the government to hit its aim of 3m new homes by 2020, a target that is looking increasingly precarious.”

The current prediction is that there will be just 75,000 homes built this year, well short of the annual target of 240,000.

Cruddas came third in Labour’s deputy leadership contest. He was backed by the unions.

“We need to reintroduce a mixed economy in terms of supply,” he told the FT.

Former heath secretary Frank Dobson is backing the push to nationalise house builders, arguing that it would increase the level of social housing.

Other voices backing the move are:

• Peter Hain, former cabinet minister.
• Austin Mitchell, MP for Grimsby and tv pundit.

The FT’s take on the situation is: “For some heavily indebted companies facing brutal workouts with lenders, the prospect of selling a stake to the government could be better than total collapse”