Osborne’s Construction failure (and the Housing solution)

Today’s budget was nothing short of a humiliation for George Osborne. Growth continues to flat-line, borrowing is rocketing and yet he still refuses to change course.

Nowhere is this failure more evident than in the construction industry, traditionally the barometer of a healthy economy. The Coalition’s record here is truly shocking. The massive 12.7% fall in output from construction last year is the single biggest reason for the continued economic stagnation, and house-building looks set to sink to the lowest level since the 1920s. The Chancellor today announced plans to build 15,000 new affordable homes. But when 360,000 families are on the housing waiting list in London alone, this is a drop in the ocean.

Let’s be honest though; we didn’t do much better. Yes, we did transform the quality of social housing through Decent Homes but the supply of new properties never kept up with demand, particularly in London and the south east.

I know how important a stable, decent and affordable home is. As a child I remember my family being evicted and becoming homeless. I remember the impact on my schooling, my family, my sense of stability and security. It breaks my heart seeing this happen to more and more children in my ward in Lewisham. With stagnant wages, families are facing a squeeze on their living standards; many are struggling to keep up with their rent or mortgage. On top of all this, there are the government’s disgraceful and vindictive welfare reforms that look set to force families out of areas like Lewisham, uprooting them from their homes, their support networks and their communities.

But there is another way. With interest rates at rock bottom, there has never been a better time to borrow and invest in house building. This will not only help relieve the immense pressure on housing, it will also help stimulate the economy and reduce the welfare bill to boot.

The government’s ideologically driven austerity agenda has killed off the recovery; the economy has grown by just 0.4% in the three years since Osborne took over and. Investing in infrastructure such as house building would be one of the best ways to stimulate our economy, allowing us to get people back to work and reduce the deficit over time. The National Housing Federation says that every affordable home we build boosts the economy by £108,000 and creates 2.3 jobs. Why is it that we’re paying labourers, tradespeople and engineers to sit on the dole when we could be paying them to build much needed houses? Providing more homes is also the only way sustainably to reduce the welfare bill. Why are we forking out billions in housing benefit to private landlords rather than investing in social housing?

We in Lewisham are doing what we can. I’m proud to be part of a council that is delivering the first council-built social housing for thirty years. But, welcome as they are, we know that the 250 new council homes we’re building will not be enough; many more are needed. And we’re having to do this in the face of savage cuts to council funding – cuts focused on poor areas like Lewisham.

By allowing local councils and communities more freedom to borrow in order to build housing, we would be able to do what the government has singularly failed to do; build more homes and get growth back into our economy.

The Tories – bound by the straight-jacket of their free-market ideology – have shown themselves unable to do this. That’s why we need Labour back in government in 2015, with housing right at the heart of our agenda for growth and social justice.

Vicky Foxcroft is a Councillor for Brockley in Lewisham and Chair of the Labour Group on Lewisham Council. She is an Officer at Unite and writes in a personal capacity.