The recent editorial in the East Herts Mercury observing that George Osborne’s 1p cut in tax on a pint of beer was designed to encourage us to drink and to forget how economically inept the Government is, is completely right.
Government borrowing is rocketing, the deficit is going up and growth is down – while millionaires laugh all the way to the bank thanks to the cut in the top rate of tax in April worth on average £100,000 to each of them.
Nowhere is the failure of this Government more evident than in the construction industry, a good barometer of a healthy economy. Last year there was a 12.7% fall in output from the construction industry. It is the biggest single reason for continuing economic stagnation with house building levels look set to sink to levels last seen in the 1920s.
Investing in house building will stimulate the economy, get people back to work and reduce the deficit over time. The Government itself recognises that every new house supports two people in employment for a year as well as providing a new home. Why are we paying labourers, tradespeople and engineers to sit on the dole when we could be paying them to build houses? Getting people back to work gives them the dignity of employment and reduces the social security bill.
The Government response is not to increase the supply of housing but to increase mortgage finance availability, a move that could fuel another house price boom and make houses even less affordable. Repeating the economic mistakes of history could be mocked if the consequences were not so serious for the UK economy and a generation of young people unable to buy their first home. It will take more than cheap beer to put it right.