CONJURING money out of fresh air is nothing new – the prestidigitators at the Bank of England will have created £375 billion through the magic of quantitative easing by the end of next month – and the UK government hopes to make billions more next year by selling off the airwaves for the next generation of mobile phones.
Telecoms regulator Ofcom has set a reserve price for the auction of £1.4bn, but some analysts believe the Treasury could raise as much as £4bn. Sounds like a lot of cash, but it would barely make a dent in public sector borrowing, which hit a record £14.4bn in August.
Still, a windfall’s a windfall, so what to do with it? The Treasury has yet to reveal its plans, and the National Endowment for Science, Technology & the Arts (Nesta) has called for the Scottish Government to lobby for a share of the money and plough the cash into high-technology start-ups.
But Ed Balls wants to use the funds to build 100,000 affordable homes and give first-time buyers a break from stamp duty. Using an estimated £3bn price tag for the 4G mobile phone spectrum, the shadow chancellor would earmark the bulk of the cash for the housebuilding programme and £500 million for a two-year stamp duty holiday to kick-start the economy.
The plan marks a distant change of tack from Labour’s previous insistence that George Osborne should focus all his efforts on reducing Britain’s deficit, but it ignores some house-shaped elephants in the room.
A lack of affordable mortgages and the difficulties prospective buyers face in saving for a deposit are major stumbling blocks on the road to home ownership. And, according to the charity Empty Homes, there are almost one million vacant properties across the UK, with around 350,000 of those classified as long-term empty – in other words, they’ve been unoccupied for at least six months.
Rather than angering the Nimby brigade by carpeting the country in yet more shoeboxes that fail to meet the needs of families, our leaders need a plan to breathe new life into empty homes.
Currently, renovations to bring a property back into use only qualify for a reduced rate of VAT if it has been vacant for two years.
If the VAT breaks kick in after six months, that should prevent properties from lying empty for years. It also means less work will be needed to bring them up to standard and provide warm, safe, homes for those who need them most.
Raising a glass to Scotland and sport
After a summer of sport which saw Bradley Wiggins winning the Tour de France, our Olympians bagging a record medals haul and Andy Murray netting his first Gland Slam victory, Scotland is looking forward to its year in the spotlight in 2014.
Glasgow will play host to the Commonwealth Games and Europe’s golfers will be vying to retain the Ryder Cup at Gleneagles – the first time the event has been staged in the home of golf for more than 40 years. And then there’s the small matter of a referendum.
Gleneagles is the understated jewel in the crown of drinks giant Diageo, which is in talks to buy a stake in United Spirits, the Indian owner of Whyte & Mackay, and is said to be mulling an offer for tequila maker Jose Cuervo.
Chief executive Paul Walsh has insisted that independence would make no difference to the company’s plans to invest in Scotland. Which is unsurprising really, given that you can’t produce Scotch anywhere else.
Nevertheless, Alex Salmond will no doubt be hoping to whip up enthusiasm for his cause on the back of sporting victory. With VisitScotland estimating that the Ryder Cup alone will generate £100m of spending, it’s clear that, regardless of who prevails at the ballot box, Scotland’s on to a winner.