Driving with the handbrake on

What should we think of a driver who routinely drove with the hand-brake on?  Or a householder who ran the central heating and the air-con at the same time, to maintain an equable temperature in the home?  Madness.
 
Yet that, in effect, is what the government is doing in the house-construction market.  It has just announced a billion-pound initiative to promote house building.  All well and good, you may say (or it would be if the government had the money, and wasn’t having to borrow it).  Yet this is the same government that gave us HIPS (Home Information Packs), perhaps the biggest spanner in the works of the housing market in living memory.  This is the government that maintains a high level of VAT on housing repairs, denying us a vibrant market in refurbished old properties, and leaving thousands of houses empty and derelict.  This is the government that has driven up stamp-duty on housing sales to eye-watering levels.
 
It makes no sense to announce initiatives to promote the housing market on the one hand, while on the other hand maintaining unnecessary and egregious barriers to obstruct it.
 
So often I see a similar attitude in Brussels.  I recently heard Monetary Commissioner Joachim Almunia announcing a range of (rather unimaginative) measures to cope with the financial crisis.  I wanted to grab him by the shoulders, and shake him, and tell him that first of all we needed a cull of old legislation, a bonfire of the regulations, to clear away the cat’s-cradle of red tape that is costing industry a fortune, and damaging our economy.  Indeed the HIPS fiasco I mentioned above is itself largely a consequence of Brussels’ requirement that all homes have environmental audits prior to sale.
 
It’s easier, and cheaper, and quicker for governments to help markets simply by getting out of the way, rather than by announcing fancy new initiatives.

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