Theresa May pledges £2bn extra funding for council housing

Theresa May revealed new plans to pump £2bn into affordable housing in her speech at the Conservative party conference on Wednesday, also confirming that parliament would debate legislation for an energy price cap as soon as next week.

The additional funding would bring current government spending on council home programmes to £9bn.

May’s speech was the high point of the Tory conference in Manchester, where foreign secretary Boris Johnson gave a rousing address on Tuesday amidst speculation about his loyalty to the PM.

In a move which is likely to boost housebuilders and construction groups, May announced housing as the central focus of her speech, kickstarting new plans to use public land to increase the housing supply in the UK.

The government will give help to local councils in order for them to finance new housing projects.

May’s focus on housing is a potential move to stave off increasing support from the younger generation, which has displayed an affinity for Jeremy Corbyn and the Labour party in recent months.

Corbyn included a promise in the Labour manifesto in June to substantially increase the council house building programme.

May's speech was interrupted at the conference after comedian Lee Nelson approached the stage to offer her a P45 form, before being led away by security at the event.

ENERGY PRICE CAP

In addition, the Prime Minister also announced that draft legislation would be introduced into parliament next week for an energy price cap, in an attempt to end "rip-off energy prices".

Energy firms such as SSE and Centrica fell following May's speech, as investors spy difficult times ahead for profits connected to the introduction of the price cap.

ETX Capital analyst Neil Wislon said Centrica was likely to be particularly badly hit.

"As noted when the policy was mooted back in May ahead of the snap election, any move to cap prices would be a massive hit to the industry," Wilson said.

"It might cost Centrica something like £200m and make it much tougher for the firm to reintroduce the progressive dividend policy. Like other providers it relies heavily on these standard variable rate tariffs – about three-quarters of customers are on these lucrative contracts."