Government responds to construction needs
Published:  22 July, 2009

LONDON: There are signs that politicians are finally beginning to take notice of the dire state of UK construction.

Said Builders' Merchants Federation managing director, Chris Pateman: "Far more needs to be done by the Government to tackle the growing housing shortage especially the availability of mortgages."

He cited the message from a second House of Commons' Select Committee inquiry published last week.

Another report looking into the key issues affecting housing during the credit crunch the Labour-controlled Communities & Local Government Select Committee - said Alastair Darling's 50m Asset-Backed Guarantee Scheme (ABS) is not working.

Committee chairwoman, Phyllis Starkey, Labour MP for Milton Keynes SW, said: "In its current form, the ABS is impressive but doomed to fail...if the Government is to meet its own housing targets, further steps must be taken to ensure housebuilders can sell the homes they build."

The Select Committee supports the Government's line in sticking to its housebuilding targets despite the credit crunch because they continue to reflect known needs.

MPs also reiterated the importance of retaining skills to avoid repeating the mistakes of the last recession, pointing out that it took 10 years to regain overall industry capacity.

The conclusions of the Select Committee were enthusiastically welcomed by the BMF, one of the founders of the 'Get Britain Building' campaign.

"Builders' merchants believe the Government is doing nowhere near enough if we are to rescue our companies, save our jobs, retain our skills, keep our apprentices, safeguard our investments and build our way out of recession," said Mr Pateman.

"This report recognises several points that 'Get Britain Building' has been making in the seven months since we started the campaign.

"The findings demonstrate that MPs are hearing an urgent, consistent message from homebuilders, housing associations, mortgage lenders and others who say action is required now to protect the nation's long-term interests. If ministers don't listen and fail to act on what those in housing and construction are saying, the Government is storing up serious problems for the future.

""The Committee's remarks on the high turnover of MPs responsible for housing & planning in Whitehall endorse the BMF's view that ministers cannot be expected to get to grips with the subject if they don't stay long."

'Get Britain Building' predicts over 400 000 construction job losses - in line with respected voices like the Local Government Association who are forecasting 447 000 redundancies between 2008-2010.

The BMF has been arguing that liquidity, responsible bank lending, available credit insurance and prompt payment are central to keeping builders' merchants in business.

"If nothing is done soon, we fear more redundancies by merchants. Over 11 000 jobs have gone since the credit crunch started," said Mr Pateman.

"During 2009, the BMF and its 'Get Britain Building' partners have been campaigning on a platform of policy, tax and administrative issues they want policymakers in government to adopt if construction is to get through the worst economic hardship endured for years."

Construction represents 9% of UK GDP and employs approx seven million people. Official figures released in June reveal the steepest fall in construction output since 1958. Total economic output fell 6.9% between January-March 2009 surpassing earlier estimates of 2.4%.

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