David Cameron and George Osborne promised to grow us out of recession. Instead they've dug the country into a deeper hole
Housebuilding is crucial to economic recovery. From the Depression of the 1930s, through the rebuilding of Britain after the second world war, to every recession since, politicians of all parties have recognised the need to build our way out of economic crisis.
The coalition government's commitment to talking about getting Britain building can hardly be denied but its success in delivery has been nothing short of disastrous.
Despite three housing launches by the prime minister, David Cameron, and the chancellor, George Osborne, who have donned wellies and high-vis jackets to go on building sites, and hundreds of housing announcements, housebuilding is at its lowest peacetime level since the 1920s. No wonder the country faces the slowest economic recovery in a century and the biggest housing crisis in a generation. While some measures have the potential to help, there has been little by way of new investment. The government has simply failed to learn the lessons of history.
Now reports suggest that Cameron and Osborne are planning yet another housing package. But many people will be asking: haven't we been here before? In 2010, the government announced their flagship housebuilding policy the "New Homes Bonus", promising to unleash growth and build at least 400,000 additional homes. In the following 12 months, both housing starts and completions fell.
One year later, Cameron unveiled what he termed "a radical and unashamedly ambitious strategy" to give the housing industry a "shot in the arm". At the heart of that strategy, we were told, was the NewBuy scheme which he claimed would assist 100,000 people to buy their own homes. To date, the government has helped just 1,500 people to realise their dreams, 1.5% of the target.
Less than 12 months later, yet another "major" housing package was announced as Cameron declared that his "government is serious about rolling its sleeves up and doing it all it can." This included a £10bn guarantee scheme which, while welcome, has yet to deliver a single penny of support for housebuilding. It took the government six months to release details of the scheme and it won't open to receive bids until April this year. And last year housing starts fell by 11% to below 100,000, less than half the number required to meet housing need.
Six months on, we're preparing for the fourth launch and yet more empty promises of building homes and creating jobs. The truth is, Cameron and Osborne haven't given housebuilding a shot in the arm, they've cut it off at the knees.
Three years ago, Labour warned the government that by recklessly raising taxes and cutting spending too far and too fast, they risked putting the recovery at risk. We warned that cutting the housing budget by 60% would not only be a devastating blow to housebuilding, the construction industry and the wider economy, but also to the millions of families in need of a home. But they failed to listen and as a result Cameron and Osborne have overseen the lowest level of housing completions compared with any other peacetime government since the 1920s. They've put 80,000 construction workers out of work and construction output has fallen by 8.2%.
Far from building Britain out of recession, their failed economic plan is digging the country into a deeper hole. Without investment, the economy can't grow. Without growth, we can't get the deficit down. And in every one of this government's housebuilding announcements the key missing ingredient has been significant investment.
What Britain needs next week is not more tinkering of the same old polices rebranded, repacked and relaunched. Instead, we need a bold and radical budget to kickstart our stagnant economy with housebuilding at its heart.
In the past week, the Confederation of British Industry and the business secretary, Vince Cable, have joined Labour's calls to get the economy growing through housebuilding. It is time the government listened. Last autumn we called on the chancellor to use the money raised from the 4G mobile spectrum auction to build 100,000 affordable homes to stimulate the economy and help tackle the housing crisis.
We should look at ways to help young people who want to get on the property ladder and are trying to save for a deposit – for example, by looking at proposals for a Housing ISA proposed by the CBI this week – and give first-time buyers a stamp duty holiday on properties up to £250,000. Let's bring forward long-term infrastructure investment in schools, roads and transport to get construction workers back to work and strengthen our economy for the future. And to improve existing housing stock, VAT on home repairs, maintenance and improvements should be cut to 5%.
These measures would boost growth, get builders back to work building the homes we need for the future and create apprenticeships for the young. Britain needs a radical budget for homes, jobs and growth, not another false dawn.