Business secretary Vince Cable has called for a programme of investment in the “severely depressed” housing and infrastructure sectors, saying spending could be “greatly expanded”.
Writing in the New Statesman today, Mr Cable said the government inherited a “severe cyclical downturn” in construction, caused by “the collapse of private housebuilding and commercial property development”.
This, he said, reduced supply capability as well as demand, at the same time as allowing skills to degrade.
Schools, small road and rail projects, and boosts to prudential borrowing by councils for housebuilding were all singled out by the secretary of state.
Mr Cable posed the “obvious question” of “why capital investment cannot now be “greatly expanded”.
“Businesses are forward-thinking and react to a future pipe-line of activity, regardless of how ‘shovel ready’ it may be,” he said, citing energy investment as an area where certainty over decades was key.
He added that construction was currently the “weakest sector” of the UK economy, and that infrastructure and housing were “significant bottlenecks” to growth.