Pre-Budget Report

Absolutely. That is why I am arguing for a big housing programme. Housing means jobs; it stimulates demand. People need to buy carpets and furniture to put in their houses, although, in the main, the stimulus benefits employment in the construction industry. The kind of housing that we need to build is public housing for rent, because that is where the demand is now. That is what the 1.8 million people on council waiting lists around the country need. They cannot afford to buy, even after the fall in prices during the past year or so. We need a big housing drive, particularly for council housing, which has been the main area of inadequacy in our performance. One fifth of the population have a standard of living that is not adequate. They are, in a sense, deprived, and they need public housing. We have not built enough of it, but that is the only way of providing for the future. It is also a guarantee that, when the economy begins to recover, all the money does not go into escalating house prices as it did before. If we build a strong public housing sector, people will not be forced to buy when they cannot afford to maintain a mortgage. They will not be pushed into sub-prime ownership. What they really want and need is public housing for rent, and we provided that in the past through a housing drive. We now need a bigger housing and construction drive than the pre-Budget report proposes. In America, a useful measure has been introduced whereby construction projects that are shovel-ready can be financed to go ahead. That is eminently sensible in a recession. In this country, 140 college building programmes were cancelled as a result of the debacle at the Learning and Skills Council. Most of those programmes were shovel-ready, including the £150 million project for the rebuilding of the Grimsby institute. That project should have been started. It would provide jobs and an economic stimulus. Why are we not doing it? The allowance for housing and construction in the pre-Budget report is inadequate. We need both in order to boost the economy, particularly in the construction industry, which is stalled everywhere. There is also a need in this debate on the pre-Budget report to grapple with another issue that is more basic than the deficit and borrowing—namely, the need to rebalance the economy, which has been lop-sidedly developing a huge financial sector on a shrinking manufacturing and production base. No economy can function efficiently or generate growth and jobs when it is unbalanced in that way. The process of rebalancing it will be painful, but it must be started. I hoped that the pre-Budget report would place a greater emphasis on this matter. We cannot pay our way in the world now, because manufacturing has shrunk so much. It has been decimated in this country over the past few decades. It has been weakened partly by the rise to dominance—even to hegemony—of the financial sector and the City of London, under whose spell I am afraid the Government fell for far too long. The rise of the City has been damaging to the real economy of manufacturing for three reasons. The first is that the City and the financial sector would rather invest in Dubai than in Doncaster. They were never concerned with the industrial needs of this country. Secondly, the City does not exercise enough long-term thinking to support the manufacturing sector, while thirdly, of course, it always wants a high and stable exchange rate. Why? So it can manipulate money around the world to acquire assets overseas. The interests of manufacturing, however, lie in a low and competitive exchange rate, which allows more exports and the selling of products on the world markets.