What does the economy mean for the election date?

After poor growth figures is the election now set for 22 April?

So everyone was sure the election was set for 6 May. At least until 9.30 yesterday morning, when the fourth-quarter GDP figures, showing growth of only 0.1 per cent, were released.

There's now real fear in Labour circles that the next quarterly figures, due out on 23 April, could show Britain falling back into recession. David Blanchflower and others warn that the return of VAT to 17.5 per cent, coupled with the bad weather -- hitting retail sales and construction -- could lead to a double-dip recession.

For the economy to return to negative growth just 13 days before the election would be humiliating for Gordon Brown and a gift to the Tories. As a result, there is now serious talk of an election on 22 April, the day before the GDP figures are published.

There's little chance of a March election, as Brown and Darling have confirmed that a Budget will be read. By law there must be at least three months between the pre-Budget report -- presented on 9 December -- and the Budget. Thus, the earliest possible date for this year's Budget is 9 March. That is after the last possible date -- 1 March -- on which Brown could call a March election. But, looking at the latest economic data, Labour strategists may now conclude an April election is the best option.

After Bob Ainsworth appeared to name 6 May as the day, bookies suspended betting on the date of the general election. I wonder if they'll reopen it now.

Here are the dates to watch:

9 March Earliest possible date for a Budget

25 March Likely date for a March election if Brown and Darling renege on their pledge to present a Budget

6 May Date of the local elections and probable date of the general election

3 June The latest possible timing for a general election

 

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George Eaton is political editor of the New Statesman.

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As long as the Tories fail to solve the housing crisis, they will struggle to win

The fall in the number of homeowners leaves the Conservatives unable to sell capitalism to those with no capital. 

For the Conservatives, rising home ownership was once a reliable route to government. Former Labour voters still speak of their gratitude to Margaret Thatcher for the Right to Buy scheme. But as home ownership has plummeted, the Tories have struggled to sell capitalism to a generation without capital. 

In Britain, ownership has fallen to 63.5 per cent, the lowest rate since 1987 and the fourth-worst in the EU. The number of private renters now exceeds 11 million (a larger number than in the social sector). The same policies that initially promoted ownership acted to reverse it. A third of Right to Buy properties fell into the hands of private landlords. High rents left tenants unable to save for a deposit.

Rather than expanding supply, the Tories have focused on subsidising demand (since 2010, housebuilding has fallen to its lowest level since 1923). At a cabinet meeting in 2013, shortly after the launch of the government’s Help to Buy scheme, George Osborne declared: “Hopefully we will get a little housing boom and everyone will be happy as property values go up”. The then-chancellor’s remark epitomised his focus on homeowners. Conservative policy was consciously designed to enrich the propertied.

A new report from the Resolution Foundation, Home Affront: housing across the generations, shows the consequences of such short-termism. Based on recent trends, less than half of millennials will buy a home before the age of 45 compared to over 70 per cent of baby boomers. Four out of every ten 30-year-olds now live in private rented accommodation (often of substandard quality) in contrast to one in ten 50 years ago. And while the average family spent just 6 per cent of their income on housing costs in the early 1960s, this has trebled to 18 per cent. 

When Theresa May launched her Conservative leadership campaign, she vowed to break with David Cameron’s approach. "Unless we deal with the housing deficit, we will see house prices keep on rising," she warned. "The divide between those who inherit wealth and those who don’t will become more pronounced. And more and more of the country’s money will go into expensive housing instead of more productive investments that generate more economic growth."

The government has since banned letting agent fees and announced an additional £1.4bn for affordable housing – a sector entirely neglected by Cameron and Osborne (see graph below). Social housing, they believed, merely created more Labour voters. "They genuinely saw housing as a petri dish for voters," Nick Clegg later recalled. "It was unbelievable." 

But though housebuilding has risen to its highest levels since 2008, with 164,960 new homes started in the year to June 2017 and 153,000 completed, this remains far short of the 250,000 required merely to meet existing demand (let alone make up the deficit). In 2016/17, the government funded just 944 homes for social rent (down from 36,000 in 2010). 

In a little-noticed speech yesterday, Sajid Javid promised a "top-to-bottom" review of social housing following the Grenfell fire. But unless this includes a substantial increase in public funding, the housing crisis will endure. 

For the Conservatives, this would pose a great enough challenge in normal times. But the political energy absorbed by Brexit, and the £15bn a year it is forecast to cost the UK, makes it still greater.

At the 2017 general election, homeowners voted for the Tories over Labour by 55 per cent to 30 per cent (mortgage holders by 43-40). By contrast, private renters backed Labour by 54 per cent to 31 per cent. As long as the latter multiply in number, while the former fall, the Tories will struggle to build a majority-winning coalition. 

George Eaton is political editor of the New Statesman.