Budget 2013 spawns another wave of zombies

What does a big house-building business say when it’s given a big stack of cash by its best mate?

“Thanks, Gov.”

Yes, the Tories’ latest wheeze for transferring wealth to places where much wealth already exists is a Help for house-builders scheme whereby we the taxpayers get to backstop highly inflationary loans dished out by the government to facilitate dubious deals on overpriced, shoddily-built houses.

Oh, there’s plenty of pie in the skies above the fields where sprawling rural slums are about to spring up. We’re promised that the scheme will kick start growth, cure the housing shortage and make home ownership more affordable.

That’s all complete bolleaux, of course. One analyst, Ian Williams of Peel Hunt, told the FT:

“As a policy for driving economic growth – limited. For solving the national shortage of housing – no impact. For wrecking long term affordability of housing – tremendous.”

But desperate times call for desperate handouts. The government’s back is against the wall and the hot breath of its corporate masters is caressing its neck. So now the zombie banks will be joined by zombie house builders: staggering blindly onwards until someone cuts the tubes through which they mainline public revenues that could otherwise go to the commons.

This is where 30 years of hypertrophic waste-fuelled growth has got us. A nation of homeowners (© M. Thatcher) for whom “ownership” adds up to paying a mortgage averaging £100,000 due to the ludicrous level of house prices.

And now with the added pleasure of watching more of our taxes being funneled to the same construction firms and banks whose greed and ineptitude was instrumental in creating the mess we’re in.

There is a real late-Roman-empire feel to our situation. The handouts get more blatant as the rhetoric gets more populist. Meanwhile real incomes stagnate and affordability drops ever faster as the people in charge frantically try to prop up asset prices.

It’s not the barbarians at the gate we should be worried about. It’s the zombies in the city.

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