Inside Housing |By Gavriel Hollander

Business leaders have called on George Osborne to more than double the government’s direct investment in affordable housing in a bid to boost the economy.

In its submission to the chancellor ahead of his autumn statement next month, the British Chamber of Commerce said that a further 100,000 affordable homes should be built through the Homes and Communities Agency’s current 2011/15 programme at a cost of £2.4 billion.

The body representing more than 100,000 UK businesses said that investment in housing on such a scale would act as a stimulus to kick start growth in the wider economy.

‘What we are saying is that construction and home building has been one of the major drags on the economic recovery,’ said Mike Spicer, senior policy advisor at the BCC. ‘The best thing about investing in homes is that it’s usually investing in local product. In terms of a multiplying effect, it’s a pretty good investment.’

The HCA and its partners have committed to build 80,000 homes by 2015 under the affordable homes programme, using £1.8 billion of government grant. The BCC’s proposal would result in that investment ballooning to £4.2 billion.

The submission outlined a range of fiscal measures to pay for the spending. These include rolling child benefit allowance into the universal credit from 2014. The move would save £2.4 billion a year according to think tank the Social Market Foundation.

The SMF also said that the government could save £1.7 billion annually be means testing winter fuel allowances.

John Longworth, director general of the BCC, said: ‘The chancellor’s autumn statement must include tough decisions to prioritise growth, without adverse effects on the government’s deficit reduction programme. We believe that resources need to be re-prioritised to support business growth, international commerce, and the building of houses and infrastructure here at home.’

 

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