Every little helps when it comes to tackling our housing crisis Will these sorts of schemes suffice to tackle the housing crisis blighting London and its commuter belt? Sadly not. Boris Johnson believes that the capital will require 42,000 new homes a year for the foreseeable future, as the result of the massive increase in jobs and population in and around London. The real number may be even higher, with the extra demand not merely for flats - which make up the vast majority of new builds in London right now - but also for suburban houses with gardens. The only way that such a large number of homes will be built, prices kept under some sort of control and home ownership rates prevented from collapsing even further will be by liberalising the planning system and releasing more land for housing. Managed carefully, this could garner popular support and allow families that are priced out of the mad London housing market to join the property-owning democracy. Crucially, the tax system will also be key: the imposition of a mansion tax would be catastrophic for housebuilding as profits made on selling expensive homes help finance the construction of cheaper ones. But in the meantime this move by Berkeley, now firmly established as one of the most skilled players in the contemporary housing market, is most welcome. Subsidising work It is Britain's Achilles" Heel. The public sector continues to spend far more than the Government raises in tax every year, and the situation is now starting to look extremely worrisome once again. As Citigroup points out in its latest research note, the UK's structural fiscal deficit is about 5pc of GDP, by far the highest in the EU, according to the European Commission. Citi itself believes that the overall deficit will come in at 5.5pc of GDP this year, which is much too high for comfort. One key reason why the surge in jobs and GDP hasn't reduced the deficit by more is that the government now spends so much subsidising low-paid work. The figures collated by Citi's Michael Saunders are striking. People with children who earn below 60pc of average earnings now get more in subsidies than they pay in income tax. The Treasury's expenditure on tax credits has rocketed from £4bn in 1994-95 and £8bn in 2000-01 to £30bn in 2014-15, with 4.5m recipients. By contrast, just 1m people on job seekers allowance collect £4bn a year. Britain faces a major crisis: for structural reasons, even a booming economy and labour market is not reducing the budget deficit any more.