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NEW SCHOOL BUILDS CAN BOOST ECONOMY

Wednesday, October 28th, 2009

By Stephen Neale

NATIONAL, UK, October 28. 2009 — Building schools and colleges significantly benefits the UK economy, according to independent research published today.

The report, Construction in the UK economy: The Benefits of Investment, by LEK Consulting, claims that construction is the best sector for stimulating employment.

It also shows that every £1 spent on construction leads to an increase in GDP of £2.84. In other areas, such as building schools, the benefits are even greater with every £1 spent leading to an economic benefit of between £3.87 and £5.04.

The report – commissioned by the CBI and the construction industry body, UK Contractors Group (UKCG) – says this is due to the direct benefit on the economy, as well as the improved education services that lead to a long-term benefit via a higher-skilled workforce.

John Cridland, CBI Deputy-Director General, said: “With the Chancellor’s Pre-Budget Report looming, the CBI is continuing to press the case for protecting capital spending by government.

“A strong economy needs fit-for-purpose schools and hospitals, and it will be the construction industry that builds the new transport and energy infrastructure needed to shift to a low-carbon economy.”

The survey follows a scaling back of public sector funding for new colleges following the demise of the Learning and Skills Council.

Figures last week showed that GDP fell by 0.4% in the third quarter of this year.

The CBI said it strengthens the case for continued investment in construction projects that are crucial to the long-term future of the UK economy.

James Wates, Chairman of the UKCG, said: “This is the first time the industry has put together a set of compelling and powerful arguments to support the case for investment in infrastructure.

“Now is the time for the whole industry to come together behind the CBI to press the message home.”

The report concluded that construction relies little on imports, so investment is more likely to generate additional economic activity within the UK.

ends

Posted in UK finance news, UK property news | No Responses »

BROWN WARNS TAX DODGERS… WE’RE COMING

Tuesday, October 13th, 2009

LONDON, UK, October 13. 2009 — Gordon Brown will target tax evaders under new plans to plug the UK’s budget deficit.

During a discussion with economic commentators at Bloomberg, in London, he warned that his investigators were already trawling through thousands of off-shore accounts.

TOUGH: Prime Minister aims to crack down on tax evasion

The crack down is one of several moves aimed at raising cash over the next two years, including a £16b sell-off of public assets.

Commenting on tax evasion he said new rules had been agreed about the regulation of off-shore havens around the world. These changes have already released £1 billion from Lichtenstein back to the British exchequer, he said.

He added: “There are 100,000 accounts in offshore tax havens that are now being investigated by our authorities, and just as America and other countries are cracking down on tax evasion and, indeed, tax avoidance, so too will we.”

read the speech in full here

The sale of public owned assets will occur over the next two years.

They include the student loan book, the Dartford Tunnel, the Channel rail link, Urenco (subject to security issues being addressed on that), the Tote and a property portfolio to be announced later this year.

Mr Brown said Britain was one of only three countries in the G7 setting out plans to halve its deficit over four years.

The Government would also focus on investing in skills and training ‘to allow the UK to continue to compete in high-value industries’.

He warned that ‘major risks’ to the international and domestic economic recovery remain, and extreme care would be required over the coming months.

On trade, Mr Brown said the world must continue to resist creeping protectionism and he said he will work to avoid a premature ending of the monetary and fiscal policies.

ends

Posted in ., UK finance news | No Responses »

NO CHANGE IN UK BANK RATE

Friday, October 9th, 2009

LONDON, UK, Oct 9. 2009 – The Bank of England’s Monetary Policy Committee has voted to keep the official Bank Rate paid on commercial bank reserves at 0.5%.

The Committee also voted to continue with its programme of asset purchases totalling £175 billion financed by the issuance of central bank reserves.

The last change in bank rate was a drop of 0.5 percentage points to 0.5% on 5 March 2009.

Responding to the Bank of England’s statement, Ian McCafferty, CBI chief economic adviser, said the economy was still in need of support.

He said: “Some economic indicators have cast a more optimistic light recently, but businesses and households should be mindful that growth is expected to remain anaemic well into 2010.

“The Bank will therefore need to use monetary policy to support the economy for a good time yet.

“It is as yet early days in gauging the effect of the QE program so far, but companies are still facing serious constraints in their financing, so the Bank must take no risks in ending the programme prematurely.”

A £75 billion programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The programme was increased to a total of £125 billion on 7 May 2009 and to a total of £175 billion on 6 August 2009.