The New Statesman endorses Ed Miliband

Why we’re backing the younger brother for the leadership of the Labour Party.

I am pleased to inform you all that the New Statesman has decided to back Ed Miliband for the Labour leadership.

But let's be clear: we believe that both Miliband brothers would make decent, able and progressive prime ministers, and could lead Labour to victory over the Con-Lib coalition at the next election. And there was much debate, discussion and agonising here in the New Statesman offices, with different members of the team backing different candidates.

In the end, however, we agreed that Ed Miliband best represents the historic ideals, values and ambitions of this magazine.

From this week's leader (which hits the newsstands tomorrow):

So far, of all the candidates, it is Ed Miliband who has been most prepared to challenge New Labour orthodoxies, to use a different kind of language. He advocates a Labour agenda that is confident, forceful and empowering, committed to greater freedom, social justice and, above all else, reducing inequality.

The primary task of the next Labour leader has to be to develop a political economy that addresses the fundamental inequalities and inequities that have blighted British society for so long -- and which will only worsen as the Con-Lib coalition's doctrinaire spending cuts begin to bite. To talk of tackling social mobility, as coalition ministers do, without addressing the ever-widening gap between rich and poor, is disingenuous. The fight for a more equal society has to become a priority again and Ed Miliband understands this (see his column on page 21). Witness his living wage campaign, his proposal for a high pay commission and his insistence on keeping the new top rate of tax for high earners.

Ed Miliband also understands that the Labour Party must once more become part of a much larger and wider movement for change -- a true movement, transcending class divisions and geographical boundaries. Rightly or wrongly, he is less contaminated than his brother and Ed Balls by the fallout from the radioactive Brown-Blair wars. With the exception of Diane Abbott, he has been most robust in denouncing the Iraq war as a great wrong, a moral failure. He has placed civil liberties and the restoration of freedoms lost during Labour's 13 years in office at the centre of his campaign. On constitutional reform, he supports the Alternative Vote, if not full proportional representation, and is an instinctive pluralist.

But our editorial position should not be seen as an attack on the other candidates and, in particular, David Miliband and Ed Balls, as the leader goes on to argue:

Our endorsement of Ed Miliband is not a rejection of his brother, nor indeed of Ed Balls. Mr Balls in particular has been impressive during this contest. As an astute and experienced economist, he is the most numerate of all the candidates. As the coalition has already discovered, he is a formidable opponent, unrelenting and forensic . . . The contest, however, is a two-horse race. David Miliband deserves his title of "front-runner". Despite his mistaken support for the catastrophic invasion of Iraq, the elder Miliband has the intellect, eloquence and experience to be Labour leader and prime minister.

The leader concludes:

The elder Miliband remains the bookies' favourite, the best-funded candidate, with the support of the New Labour establishment and much of the right-of-centre commentariat. For all of this, the race is open. Voting begins on 1 September and we urge all undecided MPs and MEPs, and Labour Party and trade union members, to vote for Ed Miliband. He is the "change candidate" who has the greatest potential to connect with a wider electorate and especially with those politically engaged young people, internationalist in outlook, who have lost faith in conventional Westminster politics but yearn for a more democratic, fairer and freer Britain. Labour needs a bold, charismatic, compassionate and visionary leader to renew the party and begin the journey back to government. Ed Miliband has shown us he could be that leader.

So will Ed M win? That's the $64,000 question. I have a hunch that Ed will win it by the narrowest of margins, thanks to transfers of votes from Balls, Burnham and Abbott supporters.

But it's just a hunch. That's all it is. Like the general election result, which all the pollsters and most of the commentariat got wrong, this Labour leadership race is too close to call. The party hasn't had a leadership election in 16 years -- and, back in 1994, Tony Blair had no credible rivals. And the 2007 deputy leadership election is a reminder of how second preferences can make all the difference.

Let the voting begin!

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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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.