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Build damn you, build

Economics is haunted by more fallacies than any other study known to man.

Economics is one of those subjects that few of us lay-people really understand. Instead we rely on commentators, journalists and actual economists to make sense of it all for us.

I’m always wildly impressed by how some people have the ability to take all this dry figure stuff and turn it into something interesting, stimulating and, even funny. I can’t tell you how many times have I marvelled at Dennis Turner, Mark Berrisford-Smith, Anthony Hilton and, on TV, the BBC’s incomparable Stephanie Flanders as they manage to cut through the difficult bits to make it all make some kind of sense. Yesterday’s BMF Members Day presentation from Dr Andrew Sentence was in the same vein.

So I was even more pleased to see that one of these has very firmly set his stall out in favour of boosting the part of the construction industry that affects merchants.

Anthony Hilton’s Evening Standard column last week says that Deputy Prime Minister Nick Clegg’s plan for boosting the economy by forging ahead with long-term public infrastructure projects such as the high speed rail link, the upgrades to the National Grid and high-speed national broadband, is all very well, but, like all long-term projects will take, well, a long time.

I’m sure there’s a good argument somewhere that rolling out high-speed broadband to the entire country is actually going to rebuild the economy, although I’m not convinced that it will do much other than let us desk-bound office workers waste time at a slightly faster rate.

Hilton, too, thinks there’s a better way of rebuilding the economy, a way that will shows its effects far sooner as it will create jobs while to builds a solution to some of the problems facing the nation: He says: “there is something which is badly needed, which creates jobs, which benefits the regions as much as the South-East, and where the benefits all stay in this country with no leakage overseas. That something is house-building.”

Hilton argues that it was housebuilding that saved the country from the worst ravages of the Depression in the 1930s and that the Government should “seek to repeat the trick”.

It’s a great argument (you can read it in its entirely here) and it points out that the damage that was done by the housebuilding slump of the last few years has had huge knock-on effects stretching from the builders through the building and house-moving industry to the high street.

Hilton is recommending a system of 25-year Homebuilder Bonds to raise cash to plough into the housing association sector. Part of the rental income from the new housing would then be used to pay the interest on the bonds. And, it would tie the pension companies into the sort of long-term investment they are crying out for. It would also be more productive to stimulate the housing association than to try and persuade the banks to lend more readily to the private sector.

Hurrah, I say, for someone outside the industry for coming out and saying what the rest of the industry know it desperately needs.

Now, we just need another way of stimulating the housing market to get transactions moving and we’ll be home and dry.

About Fiona Russell-Horne

Fiona Russell-Horne
Group Managing Editor across the BMJ portfolio.

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