Housing: the economic stimulus of choice

Steve said a few days ago, ‘it is interesting to note more people on the airwaves arguing that housebuilding is the best way get the economy moving.’

Here are two more:

According to the pollster Peter Kellner, the only economic Plan B that the public currently supports is to:

Should %

Should not %

Net

Borrow more to boost infrastructure spending

46

37

+9

All the other options YouGov tested have unfavourable ratings:

  • Borrow more to cut taxes (-2)
  • Borrow more to reverse spending cuts (-16)

And worse still for Tories, who want a ‘Plan A plus’:

  • Reduce deficit faster by spending less (-36)

Anthony Painter in his excellent piece for Labour List last week argued:

“A sensible growth plan would mix borrowing for investment with this shift to more productive public expenditure. It would make sense to widen our notion of ‘investment’ to include housing… as well as infrastructure.”

In particular he says:

“A fiscal boost could be added to build 100,000s of social and council homes… 1000s of the young unemployed and older skilled workers should receive rapid skills training in construction followed by the guarantee of a job.”

I mention Anthony as he is one of the authors of ‘In the Black Labour’, and part of a strand of Labour thinking that’s more sceptical of public spending than most in the party and certainly many of the party’s housing advocates.

Only the government and the most hardcore of rightwing economists now believe the economy doesn’t need a stimulus.

And borrowing to build more homes and more affordable homes is becoming the stimulus of choice: Housing is a productive and long-term economic asset for those on Labour’s right, desperately needed social spending for Labour’s left and part of the only Plan B that the public currently supports.

Perhaps it’s time to beef up point one of our Five Point Plan for Jobs and Growth: A £2 billion tax on bank bonuses to fund a real jobs guarantee for all young people out of work for a year and build 25,000 more affordable homes.

How about a few more than 25,000 Ed?

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One Response to Housing: the economic stimulus of choice

  1. Graham Facks-Martin says:

    The Government does NOT need to borrow more in order to increase demand whether by building more houses, repairing roads , flood alleviation, et al. According to the financial press the private sector is sitting on over £ 700 billion which in the main it is not spending mainly because of a perceived lack of demand for extra output. The Government could raise at least £100 billion of these reserves by a Capital Levy which it should then spend only on projects that can be started in the next 12 months.
    Result reduce unemployment, reduce the defecit more quickly, all without borrowing any more at all, and give a much needed boost to the economy.
    Anyone who alleges on anything that there is no alternative is lying, there are always alternatives, you might not agree with them but they exist.
    Graham Facks-Martint

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