Stagnating North East house prices are undermining George Osborne’s Budget, MPs have warned.
Labour has hit out at claims the region is set to benefit from the Chancellor’s latest Budget, despite many of the measures being welcomed by the North East Chamber of Commerce.
He told MPs: “In the North East, the Help to Buy scheme is absolutely transforming the housing market. In Humbles Wood in Prudhoe, a housing development in my area, 90% of new purchases have been through Help to Buy. That must be good news.”
But his claim riled Durham MP Kevan Jones, who quipped that the Conservatives are likely to adopt “Happy Days are Here Again as their 2015 General Election theme tune” but said people wouldn’t be fooled into believing everything was rosy.
He told the House of Commons: “I am not sure what nirvana the honourable member for Hexham lives in if he thinks that the housing market in the North East is booming. Average house prices here are still £5,000 lower than in 2008; that compares to an increase of about £77,000 in London.
“The honourable gentleman also fails to recognise that 16% of people in the North East are still in negative equity. The idea that somehow the housing market in the region is booming is wrong. We have a two-speed Britain – a booming South East and London, and a stagnating North.”
He added: “I am seriously concerned that we have a two-speed Britain. We have a housing market that has clearly been stoked in London and the South East, and we have a stagnant North.
“The honourable member for Hexham described Hexham, which is a nice constituency, and the North East, but he is living in some type of parallel universe if he thinks that the North East economy is booming. Well-paid jobs in the public and private sectors have been replaced by low-paid zero-hours contracts.”
Mark Stephenson, from the North East Chamber of Commerce, said: “Considerable challenges remain but that doesn’t negate the fact that the Budget was sensible and will help many of our members in the coming months.”