Cameron’s limp opposition to AV is no surprise

Why a No vote will be a disaster for the PM.

There's considerable confusion among Tories at the moment around the Alternative Vote (AV), and it's not simply due to the party's lacklustre campaigning effort against electoral change, but because some sincerely think Cameron wants the No vote to win. He doesn't. Indeed, for the PM, nothing could be worse, as it will finally bring him and his supporters inside the party up against the reality that they lost the 2010 general election.

The next election, which a No victory will bring substantially closer, is a grim prospect for the Cameroons. Not least because the Tories won't have Gordon Brown around to do Labour's election-losing work for work for them. Every inaction and mis-step by the supposed Tory "No" effort is still further proof of Cameron's desire to see "Yes" win.

Why will the "No" vote be so disastrous for Cameron? Because it will tear out the heart of the Liberal Democrats. For Labour, watching socialism die over decades was one thing, but for the Lib Dems, the defeat of their holy mission, electoral change, on one brutal night cannot happen without it costing Nick Clegg his job – his party will demand a Lenten sacrifice.

Furthermore, it can't happen without the Lib Dems realising that the next election will be fought on first-past-the-post, with their party stapled to Cameron and George Osborne's record. What worth a coupon election when you're tied to a brand as contaminated as that? It won't be considered, and Clegg's successor will seek a way out of the coalition at the first available moment.

It's the lesson every other coalition overseas teaches us: the smaller party prudently looks for its way out. The next election will happen well before 2015.

For all that, the main "No" campaign has been utterly unengaging. Are the polls that show an AV "Yes" lead convincing? More so, for example, than the 2:1 lead "No" had to Common Market membership at the start of the country's previous national referendum, in 1975?

Some Tories muttered that it wasn't a good sign when Matthew Elliott left the Taxpayers' Alliance to head what's currently the largest "No" campaign grouping. The scepticism was rooted in the TA's tendency too often to produce gimmicky press releases rather than hard research, and the fear that their opposition-era unwillingness to criticise Osborne's distinctly un-TAish Treasury team too loudly bore an inverse relationship to the expectations TA staffers harboured of post-election SPADships. In other words, for many on the right, this "No" campaign has always had a tame air to it.

The hard-right sneering at Elliott is doubtless all very unfair when not just downright bitter, but there's still something wrong with the No campaign beyond merely its present unimpressive tactics. It ought to have been Labour-led. Defeating AV is something Labour should have a vested interest in, and most Labour MPs see that. Yet the No campaign is Tory-dominated. Whether Ed Miliband's eccentric preference for AV has held back ambitious Labour flacks from getting involved, or it's been something to do with the culture of No2AV itself, is irrelevant. With Cameron clearly equivocal about stopping AV, as much Labour support as possible should have been sought. Margaret Beckett on a letterhead just doesn't cut it.

At the moment there aren't any "official", Electoral Commission-designated "Yes" and "No" campaigns, just one main, prominent organisation on each side. Should the AV referendum end up being delayed by the Lords, it wouldn't surprise me if a rather more vigorous "No" campaign emerged. However, that's just speculation; what's not is that David Cameron has been even more limp than normal in defence of his alleged beliefs.

A cynic might say that, given his electoral track record, that the best thing Cameron could do to secure a "Yes" vote would be to put himself at the head of the "No" campaign. But that would take courage, and he has never shown any of that. This Tory leader will offer Majoresque delay, evasion and short-term expedients, but whether that will get him the "Yes" to AV vote he so desperately needs is very uncertain indeed.

The bill for losing the 2010 election comes ever closer to being paid by the man who lost it.

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.