I’m no economic expert, and I’m most aware that there are never easy answers to economic crises, but I am concerned that the government are being awfully quiet about something that I feel could make a bit difference.
I think that it is well accepted that the current woes have been brought about by personal debt, in the western world, being out of control. Fuelled by property prices and people’s desire to own, banks and other lending institutions have sort to make huge profits by making credit easier to access. Thus helping to maintain the upward movement of property prices a Catch 22 situation! That is until it all came crashing down around everybody’s ears.
Given that, in our present system, housing is the principle driver in economic growth, I would have thought that a house building programme was essential at this moment in time to stave off the worst of the effects of the recession. Also given the current shortage of mortgages and the reluctance of people to borrow we can in no way rely on private house building to make much of a contribution. There are, as far as I can see, three very good reasons (I’m sure there are many more actually) for increasing the number of houses built. These reasons are both moral and economic, and they are:
There is a housing shortage
It would keep building workers in employment and retain those skills in the system
New homes means that people by new things to go in them, thus upping consumer spending.
If the private sector can’t deliver on housing what would be so wrong with the government financing a major council house building programme?
They are throwing money at so many other things and they have stated that they intend to fund public projects, so building houses would have such a beneficial effect on the economy. Schools and hospitals are important and I wouldn’t want to give the impression that they should not be built at all, but I do think housing should be at the very top of the list. I also believe that we should not be spending money on building offices or new council chambers or any other so called 'prestige’ projects.
A return to having a decent council housing stock, as well as having economic benefits, would also have social ones. If you treat people well they will respond to that treatment. It won’t be a universal panacea. You can’t solve society’s ills with just one initiative, but it would be a good start. Society, broken by Thatcherite policies, will take a long time to heal. This could help with repairing the damage.