A memo, from Mehdi to George: Dear Chancellor, your pants are on fire

Isn't it time for George Osborne to apologise for his mendacity during the AV campaign?

There were two depressing aspects to the electoral reform referendum in May. First, of course, there was the result: it was a crushing defeat for the Yes2AV campaign and all of us who support progressive, pluralist politics. Second, there was the US-style negative campaigning and gutter politics engaged in by the No to AV campaign and its parliamentary and media outriders. The No campaign was built on fear, hysteria and lies -- and it worked. The British public rejected a system that would have put more power in the hands of voters and reduced, in a stroke, the number of "safe seats" across the UK.

And here's the thing: the lies were brazen. The former home secretary and high-profile No to AV supporter David Blunkett admitted, on the eve of the vote, that anti-AV claims were "made up". No to AV, for example, pulled the figure "£250m" out of thin air and then argued that this would be the cost of introducing AV in the UK. One anti-AV poster -- proudly conceived by the Staggers guest blogger Dan Hodges -- claimed that the adoption of AV would automatically reduce the number of cardiac facilities available to premature babies. It was nasty stuff.

But to witness the Chancellor of the Exchequer, one of the most senior politicians in the land, getting down and dirty in the gutter on behalf of the anti-AV campaign was deeply disturbing. On 12 April, the Daily Mail reported Osborne as saying:

What really stinks is . . . one of the ways the Yes campaign is funded. The Electoral Reform Society, which is actually running some of the referendum ballots, and is being paid to do that by the taxpayer, stands to benefit if AV comes in . . . that organisation, the Electoral Reform Society -- part of it is a company [Electoral Reform Services Ltd] that makes money -- is funding the Yes campaign.

That stinks, frankly, and is exactly the sort of dodgy, behind-the-scenes shenanigans that people don't like about politics. The No campaign has asked for it to be investigated by the Electoral Commission and certainly I think there are some very, very serious questions that have to be answered.

But, on Wednesday, the Guardian's Roy Greenslade noted on his media blog that the Press Complaints Commission's latest list of resolved complaints includes two items on how Electoral Reform Services (ERSL) had complained about articles in both the Daily Mail and the Sun -- both of which carried the Chancellor's claims -- that they said contained inaccuracies. The Mail and the Sun, "to resolve the matter", agreed to publish a letter from the organisation in print and online (at the foot of the original articles).

The ERS letter pointed out:

Mr Osborne was wrong: the introduction of AV would not have required any additional voting machines and even if it had, ERSL would have gained no financial benefit because it doesn't manufacture or supply such machines.

Our services to local authorities are limited to the printing and mailing of ballot material and the provision of software for the management of electoral registers.

The Mail and the Sun have been forced to correct their misleading reports. The question is: isn't it time Mr Osborne is asked to apologise for or, at least, clarify his own dishonest claims?

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.