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CPA: ‘finance and confidence key to recovery’

Construction Product Association’s Chairman, Adrian Barden has made it clear that both finance and confidence are key to securing a sustained recovery in new housebuiding from the record post war lows suffered this year.

Barden, talking to 500 members and guests at the Association’s Autumn Lunch, said; “Whilst we would not want to see a return of the irresponsible lending for house purchase that we now realise was happening in the middle years of this decade, there is a danger that the pendulum will swing too far the other way. Recent announcements about new, more stringent criteria for mortgage lending do not fill me with confidence that we have yet got the balance right.

“If we don’t get that balance right, there will be added constraints on the industry, not just in slowing the recovery for new housing, but also in holding back house moves within the existing housing, which is so often the trigger for home improvement.”

Barden went on to stress that; “Whichever party is elected at the next Election, it is going to have to commit to a long term programme for improving the existing housing stock of this country. The alternative is to acknowledge that the carbon reduction targets that have been set are just not achievable.”

In other parts of his speech, Barden made clear that one of the reasons why the UK economy has been slow to come out of the recession is that the scale of the fiscal stimulus directed to construction has been smaller than in most other major western economies.

He said; “The US government has committed nearly £90 billion to infrastructure and housing projects over three years; in Germany £17 billion of capital investment has been made available, plus significant tax allowances for household renovation; and Australia has a £9 billion Nation Building Infrastructure programme. In the UK the total amount is less than £5 billion and the majority of this is money brought forward from future years.”

And added that; “There is little prospect of strong and sustained growth in the economy as a whole without a recovery in the fortunes of the construction industry because it makes up more almost 10% of the economy and delivers the things that are needed to sustain business success such as energy supply and the transport infrastructure.”

In conclusion he said that; “Even though the UK seems to be lagging behind other major countries in coming out of recession, the consensus seems to be that the worst is behind us. Managing the recovery is, however, just as important as managing the downturn, and the policies that the government and the Bank adopt over the next 12 months will be absolutely critical. They will determine the economic prospects for this country and our industry over the next decade.

“What we need from government to secure a long term recovery is

· A series of short term measures, particularly to do with finance and credit to help viable businesses that have been severely affected by the recession.

· A sustained level of public capital investment in construction to provide the energy, infrastructure, and skills that industry needs to be competitive in global markets

· A much greater focus in government to make the UK a place where companies want to do business and want to invest.”

The Guest Speaker was the Conservative Shadow Housing Minister, Grant Shapps, who answered a number of questions from the floor in true evasive politician style and who confirmed that he would not be supporting the Early Day Motion for a boiler scrappage scheme.

About Fiona Russell-Horne

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

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