Building Societies Association budget submission
In its budget submission to HM Treasury, the Building Societies Association calls for the Government to deliver measures that will boost house building and the economy; protect homeowners at risk of flooding, and assist hard-pressed savers:
Commenting, Adrian Coles, Director-General of the BSA said: “House building is an important growth engine for the economy and we have a desperate need for more homes. Government must do more to make this happen. Similarly we now need Government to step up and do something tangible to help savers whose rates have been decimated by four years of an ultra low bank rate. A temporary moratorium on the taxation of savings interest would benefit millions whose self-help ethic is being eroded.”
House building and the economy:
House building is an important growth engine for the UK economy. As the population rises and the size of households shrink, there is also a desperate shortage of new homes for consumers to live in. More Government focus is needed in this area, partly to drive better use of existing schemes. The BSA is specifically calling for:
- The creation of a Minister of State for Housing with a cross-departmental mandate. The objective being to co-ordinate and deliver more holistic and ambitious policy-making in this area.
- The speeding up of release of land with planning consent to boost home building.
- The creation of a UK-wide, consumer-facing housing portal to improve the take-up of housing schemes by giving the public easy access to information and advice.
- For the Government to follow the lead of the Scottish Parliament and the Welsh Assembly, both of which are looking at the structure of Stamp Duty. The BSA renews its call for this tax to move from a slab structure to a marginal basis which would be fairer to consumers and promote a healthier housing market.
- An option being considered in the sector is a Housing ISA, where funds deposited would be allocated directly to fund housing development and purchase.
Homeowners in certain areas of the UK are at increased risk of coastal, river or groundwater flooding, and many homeowners have already experienced the devastation that flooding brings. The BSA is concerned about the grave consequences to UK consumers if the universal availability of flood insurance cannot be guaranteed beyond the June expiry of the Statement of Principles. The BSA is therefore calling for:
- A rapid resolution to the issue of flood insurance as the June deadline for the expiry of the Statement of Principles rapidly approaches with no certainty for consumers or lenders.
- A scheme, similar to the Green Deal, to help homeowners at risk of flooding to improve the resistance and resilience of their homes against this threat.
Support for Savers:
Whilst the Government has taken some steps to help savers, with the introduction of the Junior ISA and the linking of ISA subscription levels to CPI, they have thus far failed to deliver other sensible reforms to ISA rules and could deliver more radical support for hard-pressed savers during this low bank rate environment. Specifically the BSA is calling for the Government to:
- Declare a moratorium on the taxation of savings interest for the period of ultra-low bank rates.
- Simplify the ISA rules allowing stocks and shares ISA’s to be transferred to a cash ISA.
- Equalise the cash ISA threshold and the stocks and shares ISA threshold.