Eliminating the structural budget deficit in the UK is going to take more than a prolonged period of austerity. Most people agree on this, and attempts to balance the books will take something more like a decent boost to economic growth. Of course, everyone has their own ideas about how to stimulate growth, but none of the suggestions offer sure-fire solutions - and without exception they involve spending more money just when spending is under pressure.
But boosting the pace of housing construction could be a relatively cheap and yet extremely effective way of tackling the problem, according to housebuilder
Indeed, a positive trend is already in place because, while UK GDP is flat at best, Berkeley Group alone increased its contribution to GDP by 16 per cent in 2012. Just this one housebuilder has contributed enough tax over the past five years to pay the salaries of 7,896 registered nurses. The point here is that all the housebuilders could make a much bigger contribution by increasing output, if only the conditions for doing so were more favourable. In fact, managing director of Berkeley, Rob Perrins, reckons that the group could invest 30 per cent more over the coming year if the government created the right conditions.
Mr Perrins believes that the message has already sunk in at government level, but not so much at local authority level, and this is where significant advances could be made in unlocking the key to greater growth. "Whitehall needs to get alongside local government and help them make decisions more quickly. We need local plans in place and early involvement from councillors," he added. And despite all the efforts to fast-track applications, it is still taking up to two years from a planning application being made to lifting the first shovel.
There are other issues that need to be addressed, notably restrictions on mortgage availability. Banks are operating under much tighter rules, and while measures such as NewBuy and Funding for Lending will go some way towards addressing the problem, there are around 2.9m potential housebuyers who cannot secure a mortgage under the current regime who would have succeeded before the credit crunch. True, mortgage lending criteria were too relaxed before the financial crisis, but arguably the opposite now applies.
However, building 240,000 houses a year would require a transformational change. After all, annual completions haven't been anything close to this for 37 years. And private construction has never been much more than 200,000 a year since records began.