Morning call: pick of the comment

The ten must-read pieces from this morning's newspapers

1. If politicians want to be trusted again, they must learn to listen (Daily Telegraph)

Jeremy Hunt MP, the Tory shadow culture secretary, argues that the internet decentralises power, giving people more control over their lives and allowing them to hold their leaders to account.

2. Justice in pay packets starts at the top. Across the board (Guardian)

Finally, moves are afoot to restrain out-of-control salaries -- in the public sector. But the problem orginates with private firms. Polly Toynbee argues for restrictions across the board, and greater respect for public-sector workers.

3. Voters will always go for Santa, not Scrooge (Times)

Optimism and pessimism will be the dividing line for the next election, argues Rachel Sylvester, looking at Cameron's and Brown's approaches so far.

4. The familiar road to failure in Afghanistan (Financial Times)

Sir Rodric Braithwaite, the former ambassador to Moscow, says Britain must learn the lessons of history in Afghanistan: no one has explained convincingly why we should succeed where the Russians and, previously, the British themselves failed, or why the war will prevent terrorism at home.

5. David Cameron needs to reclaim the centre ground (Independent)

The latest ComRes poll in today's Independent shows that voters still view the Tories as out of touch. The leading article argues that this is because the Conservative message has become increasingly contradictory.

6. Copenhagen: well that made us think, didn't it? (Times)

Agreement was always going to be almost impossible, says David Aaronovitch. But it wasn't a waste of time: it gave us a crash course in eco-education, presenting us with a "map of where we really are" and what needs to be done.

7. If you want to know who's to blame for Copenhagen, look to the US Senate (Guardian)

George Monbiot is less positive, arguing that Barack Obama's attempt to put China in the frame for failure had its origins in the absence of US campaign finance reform. China made problems, but equally the US "demanded concessions while offering nothing".

8. Time to take off the blinkers in business class (Financial Times)

There cannot be one rule for the banks and another for the rest of society, says Michael Skapinker. The banks -- which have behaved petulantly -- must show why they are necessary.

9. Where have all the big beasts gone? (Independent)

Even when Labour was slaughtered in 1983, it had a galaxy of stars and potential leaders. Steve Richards discusses the dearth of stars, which he blames on a lack of party conviction.

10. Factory schools don't give real education (Times)

A ten-hour day could close the attainment gap between state and private, but only if used well, says Anthony Seldon, discussing a scheme by the Sutton Trust to improve the education of those from deprived backgrounds.

 

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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.