The Chancellor said that was not the aim of his policy but stopped short of ruling out a ban on people using his Budget schemes to purchase a second property rather than get a foot on the housing ladder or move up it.

Yesterday Mr Osborne announced a £3.5bn Help to Buy programme under which the Government will provide up to 20 per cent of a deposit and the buyer only 5 per cent for a new-build home.  He also promised £12bn to underwrite £130bn of mortgage lending for any property costing under £600,000.

Ed Balls, the shadow Chancellor, told the Commons this afternoon that Mr Osborne was bringing in “subsidised mortgages  for millionaires”.  He contrasted what he called  a “spare home for millionaires”  with the so-called “bedroom tax” which will cut housing benefit for  social housing tenants from next month if they have a spare room.

Mr Balls claimed: “The Government is basically saying that if you’ve got a spare room in a social home you’ll have to pay the bedroom tax, but if you want a spare home we’ll help you buy one.”

The shadow Chancellor added: “Surely people struggling to get a mortgage and those who want to own their first home must be the priority for help, not the small number who can afford to buy a second one. We will only tackle the housing crisis and help first time buyers if we finally build the new affordable homes we have said should be at the heart of any proper plan for jobs and growth.”

In media interviews, Mr Osborne refused to say whether people would be able to use the guarantee scheme to purchase second homes. “The mortgage market is an extremely complex thing,” he said. “The intention of the scheme is absolutely clear, which is that it is for people who want to get their first home or have a home and want to move to a bigger home, because perhaps they have got a bigger family.We are working with the industry to get a scheme that works.”

The Chancellor  added: “If we were in a housing boom then this is not the kind of intervention you would take. But actually our housing market is not actually properly functioning at the moment.”

Labour opened up a second line of attack by accusing Mr Osborne of “fiddling the figures” to ensure that he did not have to announce a year-on-year rise in borrowing in the Budget. The Opposition claimed that Whitehall departments had delayed spending in the final  three of months of the financial year ending this month to prevent the Chancellor overshooting his £121bn in 2011-12. He narrowly avoided that by a mere £100m.

Chris Leslie, a Labour Treasury spokesman, accused the Chancellor of using “smoke and mirrors,” such as delaying  payments to international institutions like the EU, to keep down the borrowing figures.

Mr Osborne insisted he had acted to stop departments “splurging” money at the end of the financial year. “We had a rather strange situation where Government departments were happily spending around £32bn a month over the first 10 months of the year, and then they suddenly, for the last two months of the financial year, they would spend £35bn,” he said.  “They are trying to get the money out of the door to spend their budget. What we have done is, first of all, we have asked whether it is really necessary to have this big splurge in spending in the last two months of the financial year and we have brought that down to the average of the other months of the year.”

In a round of media interviews today, the Chancellor argued that Britain’s gloomy economic outlook could be even worse. He said: “It’s a difficult situation, but it could be a lot worse. You only have to watch your news bulletins to see other countries, not far from here, who have not confronted their problems and who are worried about getting money out of the bank.

“It’s a difficult situation. It’s a difficult neighbourhood. We have made a lot of mistakes as a country, over many years, building up these debts. But my determination is not to run away but to confront them head on.”

George Osborne under fire: Labour brands Budget home ownership boost … – The Independent
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