This was not the Budget to fix broken Britain

As Jeremy Hunt resumed his seat after yesterday’s Budget the false bonhomie masking apprehension on the faces of his colleagues on the Conservative benches spoke volumes. With a general election around the corner, the Budget was supposed to buy the government the chance of another term of office, but I would imagine that many Tory MPs will now be ordering the removal van.

Construction and property are bellwether industrial sectors and our numbers make grim reading, with construction activity recording almost flat output levels in February after five months of falls.

This is the core issue that the chancellor should have been addressing –  how to inspire confidence, fan growth and improve productivity. Rather than tinker around the edges like increasing the VAT registration threshold by a meagre £5,000, minimal investment in housing and full lease expensing “when affordable”, he should look at the anaemic UK economy as needing a transfusion not a sticking plaster.

Our GDP is only predicted to be marginally higher this year at 0.8% for instance. This was a Budget to stop us bleeding out before the election, not a long-term recovery plan.

Let’s look at some of the things that may be politically risky but economically valid and could have been enacted yesterday but weren’t. An easy win would have been to extend council tax bands in England beyond band H to capture the value of more expensive homes, handing local authorities more money.

Current council tax bands were established based on house prices in 1991,  when the average cost of a house was around £58,000. Updating this local tax would hand more money to local authorities. However, any additional funding from this source should be ring-fenced to invest in housing.

There needs to be a major housebuilding programme nationwide and it needs to be targeted at a lost generation 

A recent survey of affordable housing in London found that the biggest builders of affordable housing in London are on track to start just 1,769 homes in the capital this year, a fall of 76% compared with the 7,363 started in 2022-23. There needs to be a major housebuilding programme nationwide and it needs to be targeted at a lost generation who are rightly resentful and lacking the opportunities gifted to their parents and grandparents.

To stave off criticism that this additional funding will go to line the pockets of the housebuilders, how about a targeted wealth tax? It is reported that multimillionaires are ready to pay more, according to a poll last month that coincided with a gathering of powerful policymakers and the super-rich at the World Economic Forum in Davos.

A majority supported the introduction of a 2% wealth tax on people with more than $10m (£8m). For those who live on the interest from their interest, it would be a major re-calibration of the fairness metric.

I appreciate that it is not within the power of government to set interest rates, but perhaps it should be. The Bank of England has consistently got its forecasts wrong and lowering rates would hand some money back to beleaguered mortgage payers and businesses.

According to the latest Retail Price Index figures, mortgage inflation is running at 45%, which is crippling for those who need to refinance their loans.

Britain is highly indebted, so small adjustments to interest rates can make a big difference to the annual costs of borrowing. The Treasury being independent of the Bank of England is a bit like having the finance director at a business working to a different dashboard than the rest of the boardroom.

Finally, we have one of the worst long-term sickness records in Europe. The chancellor highlighted 900,000 vacancies and 10 million adults of working age not in work. Meanwhile, last summer the number of open vacancies in construction trades reached 140,000, with builders, electricians and plumbers in highest demand.

I am not suggesting that a physically demanding trade role is going to suit someone off work with long covid. I am also not of the view that we are a nation of lazy malingerers. However, I do think that tax breaks, bonuses and some serious investment in mental health and reducing hospital waiting lists are all interlinked.

Perhaps it is time that we do not just think outside the box. Maybe we need to smash the box altogether

There is a proven link between good mental health and better nutrition, so let’s focus on making the population healthier first and foremost – this kind of education starts at school – and incentivise people to get back to work.

This Budget was much pre-leaked. In the end it proved to be less than the sum of its parts as far as impact on those operating in the built environment. I don’t pretend to have all the solutions, but it is clear that radical thinking is what is needed, and this Budget had little to get the juices flowing for those of us looking for long-term improvements.

Perhaps it is time that we do not just think outside the box. Maybe we need to smash the box altogether and start again by building a new box. This is a time for less sticking plaster economics and more major invasive surgery.

Richard Steer is chairman of Gleeds Worldwide