The magnitude and unpredictability of the events of the last few months are beyond any of our experiences.
The pace at which events have unfolded in our global economy means Harold Wilson’s famous phrase “a week is a long time in politics” seems like something from the Dark Ages.
We are too close to events to make an objective assessment of what it means in the long-term. Some believe this is the point where the
focus of the global economy shifts from West to East. For others, this is just another cyclical recession.
As the financial crisis unfolded, the construction industry faced a twin threat from the collapse of liquidity in the fin-ancial markets and major cut-backs in state spending as public money was used to shore up the banking system.
Our customers, whether major developers or individual households, require access to capital to fund projects.
It has been absolutely critical that the Government should restore liquidity in the financial markets and we welcome the decisive action.
But, as we enter a recession, it is not the time to cut back on things that will help bolster a weakening economy and prepare us to take advantage of the upturn when it arrives.
We are encouraged by the Chancellor’s recent commitment to maintaining the levels of capital investment in the Comprehensive Spending Review and looking at ways of bringing forward spending to help minimise the impact of the downturn.
Housing is a priority. Through the new Homes and Communities Agency, it is imperative that funds are brought forward to buy land and fund the housing that will help maintain a modicum of house building in this country.
Bringing forward major projects in the schools and health programmes will not be so easy. The timetable for Building Schools for the Future has already been revised twice - the original target was 350 schools open by April 2008, this was revised down to 100, and this revised target has now been put back to April next year.
Energy efficient incentives
We have written to the Chancellor urging him to look at investing more in improving existing housing to help meet targets on climate change.
The current CERT scheme is far too restricted in scope - we see an opportunity for the Government to incentivise householders to replace old and inefficient heating systems, install double glazing, and take other measures to make their homes more energy efficient. We recently met housing minister Margaret Beckett to discuss this further.
The Government has been decisive in its steps to save the banks. The time has now come for an equally decisive decision on how we improve our existing housing stock.
We are expecting a consultation paper this month and the CPA will be ensuring that every Member of Parliament is fully aware of what needs to be done.
Adrian Barden is chairman of the Construction Products Association.