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CBI chief calls for construction spending to drive growth

30 Sep 11 The director-general of the CBI has called on the government to use construction spending to rescue the economy.

John Cridland
John Cridland

John Cridland says that boosting activity in the housing market and construction sector could be a major “game-changer” for growth.

In a speech to the CBI Northeast annual dinner last night, Mr Cridland said: “Bolstering infrastructure spending investment on transport, power stations and housing is one of the biggest and most effective levers the government has to pull.  It will help unlock some of the £60 billion of potential investment currently on company balance sheets and could create new jobs into the bargain.”

Seeking to influence chancellor George Osborne ahead of the autumn statement, Mr Cridland called for action to get the housing market moving again.

“To my mind another major game-changer - when it comes to confidence – is the housing market,” he said.

“Now is the time to stop the stagnation and get the housing market flowing again. The CBI wants to see a revitalised Mortgage Indemnity Guarantee, to reduce the risk of higher loan to value mortgages. One way this could be done would be through a deal between mortgage providers and house builders. There could also be a role for government to step in with some very focused support to bridge the gap.

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“Another way of helping first-time buyers to access finance to get on the property ladder could be to allow them to access locked savings in their personal pension pots through a loan-back scheme. Members of company schemes could borrow money from their own pension pot at a low cost, paying the loan back through their salary at any time during their working life.

“Also worth further exploration is Shared Ownership. It was successful during the Thatcher years and a new 21st century model of ownership could make a difference.

“I want to see the Chancellor use his autumn statement on 29 November to jump-start the housing market.

“A determined attack on the major blockers of finance and planning, could transform the outlook of a generation of young people and provide a huge fillip to consumer and business confidence.”

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