The budget did not really do very much to help those people living in rented housing and paying exorbitant rents. Easing Stamp Duty could easily result in sellers raising their prices nullifying any benefit. The Tories persist with the idealistic aim of producing a nation of home owners, they are promising to build more houses and in the long run that might satisfy the demand for houses by those that can afford them but the truth is that there is a very large section of the population who are struggling to pay the rents that are demanded by their landlords with no hope of ever saving the deposit for a house even though their rent might be enough to pay a mortgage on a modest house. There was nothing in the budget to help these people. There is little likelihood of a significant drop in house prices except and unless there is a major depression. Too many people are keen to maintain house prices at or above the present level. Home owners have no wish to see the value of their property fall, especially if it is heavily mortgaged, those that invested in houses to rent do not want the value of their investment, or the rents they are receiving, falling. Builders wouldn’t want to see the value falling, although they might be happy to see land prices go down.
In recent years we have been building 220,000 homes a year and that has had little impact on prices but our ability to build at a much faster rate is doubtful in terms of the skills available and the supply of materials, already there is evidence of shortages of bricks and roof tiles.
What is needed is a really big increase in public housing at moderate rents so that those at the bottom of the economy might have a decent home and those who are more prosperous might be able to save towards a deposit to enable them to move up the ladder. The only way of achieving this in the short term that I can see is with a large investment by government in prefabricated houses, combined with compulsory land purchase. This is what happened in post-war Britain with great success and has been used in other countries. Such actions would not be popular with most conservative politicians although I believe there are some that are beginning to realize that something quite drastic is necessary.
Farce or Tragedy
Recently I saw Brexit described as a farce but using the theatrical analogy I would describe it as a tragedy. Almost every day there is further evidence of the undesirable consequences of leaving the EU. The recent budget revealed a very dismal economic future for our nation, no financial body or independent financial expert that I have heard has suggested a bright future for us outside of Europe. In just one day’s newspapers I read that the European Medicines Agency is moving from London to Amsterdam and the European Banking Authority is moving from London to Paris. I also read that British Banks and financial services concerns will lose their passporting rights. Currently they have the right to freely offer their services across the whole of Europe, to 500 million consumers and 22 million businesses. The loss of those rights will be a bitter blow for our financial services sector. We have also lost our seat on the International Court of Justice, the first time ever.
Only a few days later, on the day of the budget, we learned that the age of austerity and falling real wages would be with us for another ten years, we also discovered that we are no longer the fifth largest economy and have dropped to sixth, below France.
More and more I see us becoming a less significant island off the coast of Europe as a consequence of Brexit. When people voted in the referendum they were voting largely in ignorance of the consequences, they were promised that there would be £350M/week available for the NHS, what they are now learning is that they will be paying money billions to the EU for years to come. I note that an internet poll has revealed that the majority would like to see a second referendum and I am sure that, as the consequences become more apparent, that majority will grow. Such a referendum would need to be a choice between the terms negotiated and remaining in the EU. It must not be a choice of “do you except the terms or not” because a no-vote might imply leaving the EU with no terms.