Budget 2016: Talk is cheap
Sarah Davidson is deputy editor of Mortgage Introducer
Today’s Budget was high on rhetoric and woefully short on action to back it up.
As the Chancellor rushed through disappointing economic figures, poorer than expected GDP growth and failed even to mention the clanger that it would be binning its brand new Pension Wise service and consigning its abject failure Money Advice Service to the history books, I found myself playing some Budget Bingo.
“This is a Budget for the next generation,” proclaimed George Osborne no fewer than 21 times in an hour.
“Long term” featured 18 times and in the same vein “we will act now so we don’t pay later,” was rolled out six times.
“Doing the right thing for the next generation is what the government and this Budget is about, no matter how difficult and controversial it is,” declaimed Osborne.
He also admitted: “In every international survey of our country, our failure for a generation to build new housing and new transport has been identified as a major problem.”
And, harking back to a previous favourite of this government’s “get Britain building,” he went on to claim: “But we are the builders.”
It is not only utterly preposterous to suggest that this government has done even half of what is necessary to boost construction of the new homes that are so badly needed in the UK, it is positively galling to claim that on this issue the government is putting the needs of the next generation first.
Quarter after quarter the Office for National Statistics rolls out figures showing that construction output has fallen, or, if it’s risen, it’s been by a measly percentage point or two.
Absolutely everyone, but everyone, agrees that there are not enough homes in this country; house prices are out of control in London and the South East where jobs are concentrated and the types of housing are inadequate for the needs of an increasingly ageing population.
We are not building enough and there are still too many restrictions on developers wanting to build on green belt land – which in itself is an erroneous and outdated misnomer suggesting this planning designation is related to environmental preservation when it’s nothing of the sort.
Housing report after housing report has been commissioned over the past decade and each one has been pretty much ignored.
Kate Barker, a former Monetary Policy Committee member and the author of the Barker Review of Housing Supply, said in the early 2000s that the UK needed to build 250,000 new homes a year to prevent spiralling house prices and a generation of people locked out of homeownership.
She was resolutely ignored.
In 2007 the Labour government set a target of 240,000 homes to be built every year by 2016 but never managed actually to reach that target.
Governments of every hue have consistently missed this and every subsequent target: in 2012-13 we managed just 135,000 new homes and output hasn’t improved dramatically since.
All of this is not to say that the government hasn’t been vocal on housing: quite the contrary.
We have had funding for lending, Help to Buy mortgages and Help to Buy ISAs, stamp duty freezes for first-time buyers, Right to Buy extensions, tax relief cuts for landlords, self-build, custom build, the Starter Homes Initiative, apparent cuts to planning red tape and much more.
While none of these schemes should be dismissed out of hand the reality is that they boil down to political PR.
Being a journalist, words are important to me. But there is a time for talk and this isn’t it.
We need action on housing – to use Osborne’s much beloved phrase – for the long-term.
And if we are to preserve the very basic British right to live in decent quality accommodation tinkering with tax breaks is not the way.
If this had been a Budget for the next generation, the Chancellor would have been true to his claims and been unafraid to force the housing supply issue – to provide large scale incentives to builders and large developers to build.
We heard nothing on the potential to bring empty homes back into use which would provide more than a million homes to Britons living in England and Wales.
The very practical shortage of skilled tradesmen to build new properties or refurbish derelict ones has still to be recognised let alone addressed.
And there was no progress on incentivising couples in retirement living in large family homes to move house to more appropriate accommodation to free up homes for families needing to move up the ladder – particularly in terms of the provision of new homes that fit older borrowers’ needs.
That we still, after decades, have a housing minister without a cabinet seat does nothing to inspire confidence that government promises to get Britain building will be delivered in bricks and mortar.
This government chooses to act now so we don’t have to pay later?
I am afraid on the issue of housing – the biggest infrastructure issue facing the UK’s economy – that is one claim that just doesn’t ring true.