So the pre-Budget announcements are over and quite obviously the 2.5% reduction in VAT costing around £12.5billion will be largely wasted. It will do little if anything to stimulate the economy that’s even if traders pass it on and don’t simply raise their prices slightly to boost flagging profit margins.
It could have been better spent. We have around a million people who are homeless or living in sub standard housing. Freeing up Government owned land for social housing and giving local councils perhaps more compulsory purchase powers it would be possible to easily build a home for £100,000 which means that 125,000 additional houses could be built. The employment derived from this would be enormous and not just builders but all the manufacturing of materials, most of which would be British made. Add to this all the carpets, curtains, white goods, garden equipment etc purchased as people moved in and the stimulus to our economy would be huge.
The important part of the above is ‘social housing,’ houses for rent and permanently for rent thus replenishing the housing stock following the disastrous ‘Right to Buy’ policy of Thatcher and continued by successive governments. It would have the added bonus of helping house prices to stabilise at a more sensible level and help to prevent a future credit binge based on ever increasing property prices.