Views
Housing and the economy - for The Inverness Courier
THE news that the successful local building firm Tulloch has had to lay off a number of staff is the latest worrying sign that the financial crisis is starting to do real damage to the economy. It is a stark reminder that we in the Highlands cannot be isolated from the wider economic problems of the UK.
The government is currently in a state of denial about the economy. It does not seem to realise that a recession is looming combined with painful inflation and that the housing market is in a state of collapse dragging down construction companies and mortgage lending banks as well as, potentially, millions of home buyers.
Some of the huge building firms have made thousands of people redundant, as the rising cost of mortgages and price rises for fuel and food cause the housing market to stagnate. In some parts of England, large numbers of new homes have been built but the developers are unable to sell them.
At the same, we have thousands of people in the Highlands — millions across Britain — who are in housing need. Many people simply cannot afford to buy a home, and there is not enough council or housing association housing to go round. Can we link these two problems together, to create a virtuous circle?
This week, the Liberal Democrats put forward the idea that councils and other registered social landlords should be encouraged to engage in large scale acquisition of houses that cannot be sold in the current depressed housing market, in order to provide homes for the homeless or for those who cannot afford to buy or rent in the private sector. Such a scheme would provide a cash-flow injection to the troubled house-building sector and would help banks cope with the credit crunch.
The UK Government currently has a pathetically small plan to do this — planning to buy 1000 homes over several years. On a much bigger scale, such a programme could make a real difference to many people priced out of the housing market at the moment and boost the economy at a very difficult time too.
Young families in the Highlands have been unable to afford the rapidly rising house prices of recent years. It is a cruel irony that the financial system is clamming up at a time when homes might become more affordable. If it wanted, the government could really help. Instead, Mr Brown and Mr Darling seem intent on burying their heads in the sand about the scale of the economic difficulties facing ordinary people. The prime minister seems more concerned to examine the contents of our fridges than managing the nation's finances.
HEATING OIL
The rise in oil price is also affecting huge numbers of people locally who rely on fuel oil to heat their homes. When government ministers in Edinburgh or London talk about "fuel poverty" they always talk about electricity and gas, forgetting the people, especially in rural areas, who do not — and never will — have access to mains gas.
I raised this issue in the Commons last week, and energy minister Malcolm Wicks was full of sympathy but had no real answer. Micro-generation — small scale home renewables — are a very good idea, but the government is simply not willing to commit the money to make this a reality for people living on low incomes in remote areas. Few of these homes have benefited from any support from the government for proper insulation that would make a real difference.
The government has no real strategy for tackling fuel poverty and it needs to get one fast. But it is time for the government to get tough with the energy companies, who have made £9 billion of windfall profits through the operation of the European Emissions Trading Scheme. I would like to see the government force the companies to spend a much larger share of this money on one-off projects — like insulation and home renewables — that could substantially reduce energy bills, as well as emissions, every year thereafter. And heating oil customers must not be pushed to the back of the queue.
Posted on: 15/07/2008
