Looking back from 2020 how will we view this golden opportunity to build homes if it’s missed

Looking back from 2020 how will we view this golden opportunity to build homes if it’s missed

Sometimes I find I get a better perspective on things imagining how they might be viewed from the future. So here’s me looking back (yes, with anger) from 2020 at our current efforts to get houses built.

I’m nine years older watching TV with growing irritation.

The story strap under the newscaster reads: “Housing Crisis Report: Why we need three million more homes”

The picture skips to the housing minister being quizzed by the station’s business editor.

“This report, released today, puts the housing shortage at three million homes. Why, minister, didn’t we just build more homes when we had a chance during the recession to build them at a far lower cost to the nation than today?” asks the journalist.

The housing minister obfuscates: “Well, certainly the previous Government made mistakes. Lessons have been learned…”

“But you personally were in charge for much of that time, why didn’t you do something?” the journalist persists.

The reply comes with near audible handwringing: “Well it’s easy with 2020 hindsight.”

“But come on,” spits the journalist in Paxman style.

“This report shows there were between a third and a half a million construction workers on the dole. If you’d put just 100,000 of those to work building houses you would have saved almost £1.5 billion a year in benefits and clawed back a further £700 million in employment tax and NI.”

The minister interjects, desperately seeking to bridge to his newly relaunched flagship policy: “Yes, that’s absolutely a fair criticism. I agree. That is why we launched FairPay to get more young families onto the housing ladder and builders building again. As you know the aim…”

He’s cut dead by the journalist: “But with all due respect minister, that’s just applying a sticking plaster to the gaping hole left in the nation’s housing stock. Can you answer me this…

“It was costing the nation more than £2 billion a year to keep every 100,000 skilled workers on the scrapheap throughout the recession. That doesn’t account for managers, planners, lawyers, estate agents and the like.

“It doesn’t take account of the extra spending those brought back into work would have made, the extra VAT they would have paid, the jobs they would have sustained in shops and offices up and down the country.

“And there’s the suffering of the homeless, the ill health of the badly housed and the social spillover from that which impacts on us all.

“You had a golden opportunity to train up thousands of the 1 million young adults languishing as NEETs. Over that period we lost thousands of skilled workers, the very skills we are screaming for now…”

The minister cuts in again: “But that’s exactly what I’m saying. FairPay is linked to job creation. It’s linked to getting our young adults back into the workplace and giving more people a roof over their heads…”

“Come on minister. You, your predecessors, you all failed and your current scheme is too little too late.”

“The report shows that much more could so easily have been done. For every home you built during the recession the Treasury would have pocketed 20 to 30 grand in savings. And you blew it.”

The minister, keen to break the attack, butts in: “But you must understand that the nation’s finances were in a mess, we’d been through the worst financial crisis on record.”

Dismissing the minister with the line, “so the Government was happy to waste billions a year supporting families out of work instead of spending on things that had to be done anyway and putting people back to much needed work,” the journalist picks up the report and reads.

“Minister, there were options. Here’s just one of the many suggested in this report. On the basis of an estimated build cost of £100,000 per home, correctly executed, the Government could have created a ring-fenced investment vehicle worth £10 billion annually to deliver 100,000 new homes on public land each year at a net cost to the nation of little more than £7 billion annually.

“If those homes were sold over time when the economy picked up into the private and non-profit sector, it would have – given the house price inflation we’ve seen – netted a surplus to the Treasury well in excess of £3 billion for each year of operation. And that’s on modest assumptions, it says here.”

“My reading of that, minister, is that UK taxpayers are now £30 billion worse off and our nation has been robbed of about a million homes.”

The minister interjects: “But that is based on a huge number of maybes and hypotheticals…”

At that point I have to switch off the TV…

I have been banging on about case for promoting spending on homes for the past three years. Here’s a blog from November 2008 containing some compelling (in my view) numbers to suggest why building homes in a recession makes such good sense. They may be a bit out of date, but there is a host of ways you can do the sums and basically not building now is wasting one of the few upsides of a recession. 

One thought on “Looking back from 2020 how will we view this golden opportunity to build homes if it’s missed

  1. We did this in the 1930s depression and it worked then. Margaret Thatcher’s Housing Minister and now MP for Tonbridge, Sir John Stanley, did something similar in the recession of the 80s but focussing on housing upgrades. So with the current depression looking like it will last longer than the depression in the 30s, why not now. Better to pay people to build homes and roads than to pay them to be unemployed…

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