The director general of the CBI has called for a construction stimulus package to prevent the economy falling back into recession, Construction Enquirer reported.
Until now the CBI has cautiously supported the Government’s spending policy, but CBI Director-General, John Cridland, told business leaders that boosting the economy by stimulating housing and infrastructure would be a major “game-changer” for growth.
In a speech to the CBI North-East annual dinner Cridland said: “I want to see the Chancellor use his autumn statement on 29 November to jump-start the housing market.”
Cridland called for a revitalised mortgage Indemnity Guarantee, a new model of shared ownership and help for the construction industry. He condemned the fact that the average age of first time buyers has risen to 43, Building reported.
“Bolstering infrastructure spending investment on transport, power stations and housing is one of the biggest and most effective levers the government has to pull. It will help unlock some of the £60 billion of potential investment currently on company balance sheets and could create new jobs into the bargain.
“Now is the time to stop the stagnation and get the housing market flowing again. The CBI wants to see a revitalised mortgage Indemnity Guarantee, to reduce the risk of higher loan to value mortgages. One way this could be done would be through a deal between mortgage providers and housebuilders. There could also be a role for government to step in with some very focused support to bridge the gap,” he said.
He said that owning a home had been “a natural aspiration” for generations of Britons since the 1950s but the consequences of the recession had put home ownership out of reach for all but the lucky few.
“As we have seen, without a steady stream of eager first-time buyers the housing market stagnates and our whole economy suffers,” he said.
He suggested that one model for helping first-time buyers would be to give them access to savings within their pensions through a loan-back scheme.
“A determined attack on the major blockers of finance and planning, could transform the outlook of a generation of young people and provide a huge fillip to consumer and business confidence,” he said.
