The qualities of a great man are vision, integrity, courage, understanding,
So, according to research by economists LEK, boosting the construction industry could prove the biggest way to boost the UK economy. That’s because every £1 spent on construction leads to an increase in GDP of £2.84, as the spending not only creates construction output worth £1, but also stimulates growth elsewhere in the economy worth £1.84.
The report, commissioned by the UK Contractors Group (UKCG), in partnership with the CBI also found that construction industry is a driver of growth in other sectors due to its heavy reliance on an extended and varied supply chain.
Construction relies little on imports, so investment is more likely to generate additional economic activity within the UK. Construction is not only immediate economic production. It is also investment rather than consumption, which provides significant long-term economic and social benefits to the country.
Hmm, haven’t I heard something like that before? Oh, wait, yes. That is exactly what the Get Britain Building Campaign is all about.
The campaign launched earlier this year to not only to highlight the problems faced by the hundreds of thousands of people living and working in the UK construction industry, but also to persuade the government to do something about it.
The campaign’s 10-point plan included such perfectly reasonable demands as getting the banks to start lending again – in a sensible way to trustworthy individuals or businesses (or words to that effect), developing a co0herent strategy to deal with the existing housing stock to get homes moving and to make them more efficient and bringing down the rate of VAT to 5% on building repair and maintenance work
Sadly, the Budget came and went without very much. There has been a great deal of noise about the money invested to try and kick-start the building programmes (handily called the Kick Start schemes) and it’s true that there is a lot more activity on building sites since then.
Obviously, noticeable by its absence was anything resembling a cut on VAT on building repair and maintenance work – something the Scottish Federation of Builders has renewed calls for this week.
The Chancellor’s Pre-Budget Report is looming so influential bodies are getting their wish lists out there. We probably won’t see any more movement on the VAT rate cut but what this latest report shows is that it’s vital that the government understands the benefits to the wider economy of investing in the construction industry.
As the CBI Deputy-Director General John Cridland put it in the report: “A strong economy needs fit-for-purpose schools and hospitals, and it will be the construction industry that builds the new transport and energy infrastructure needed to shift to a low-carbon economy.”
What are the chances of the government actually listening? We’ve had nine construction ministers in eight years so I would rate them about as much as our chances of getting a government who actually understands the needs and importance of the construction industry.