So where is all this supposed growth to come from ?

22 October 2010

Spending review....well, I have been sitting around home this week due my enforced holiday, (my arm is healing nicely, thankyou!) and I have had the time to think about this latest round of cuts which have been announced.

One thing strikes me as strange, if not impossible. 500,000 jobs are to go in the public sector and my guess is that the private sector can expect to get rid of the same number of people. At the same time there are cuts to benefits. So people will have less money to spend and this can only impact on the economy. So where is all this supposed growth to come from?

How can the economy improve when none of us can leave our houses, let alone think about starting up businesses or shopping for luxury goods? I can see another recession on the horizon. But what about us builders?

Well, if you are unlucky enough to work for a house builder, you might be glad to hear about the cut to funding for new social housing – not! Just as the construction industry was starting to move forward again, it seems as though the government has pulled the carpet out from under them. One paper has said that there could be a loss of 360,000 jobs in construction. That means loads more blokes out there doing what I do, and I don't need the competition.

People living in social housing are also going to be expected to pay closer to market rents. While this sound like a good idea in principle what it will mean is that many of them will simply move into private rentals. This will increase demand and push up those prices too. Great if you are a landlord, I suppose.

Just 150,000 new affordable homes are planned to be built. I remember when there was a target of 2 million new homes by 2012. I wonder what happened to that? Those 150,000 houses will be snapped up by the big house-builders pretty quick, so no benefit for you and me!

One thing I have been realising is that the government seems to be pretty interested in this whole climate change issue. It seems to be the way forward for us builders. If we can target our skills at people who are taking advantage of the Green Deal then it could lead to new work opportunities. They have said that they will help homeowners to improve the environmental credentials of their houses. So if there is some of that business kicking about it makes sense to pick it up.

Finally there will be 75,000 more apprentices out there looking for placements over the next couple of years. Which of us tradesmen is going to offer them a job? It doesn't matter how much the government pays towards it, having an apprentice is not cheap and is time-consuming. So while it sounds good, it is pie in the sky in my opinion.

Anyway – no good news, that I can see. Not for those of us who got off our backsides and set up our own businesses. I just can't see the sense in cutting everything when we want people to spend money. Chances are that us tradesmen will notice pretty quick that having a new kitchen is the last of people's priorities.

Oh and it looks as though Claire and I will lose our child benefit. It really made sense trying to earn a bit more money...