Why I think Ed Balls “gets it”

We need a robust leader who can defend Labour’s legacy, and I think Ed is that leader.

When Gordon Brown announced he was standing down I was genuinely open-minded about who to support in the Labour leadership contest. I'd not given the matter of his successor much thought; I wanted Gordon to win the election for Labour, and stay as our leader and our prime minister, and all my energies were focused on helping him achieve that end. Neither did I have strong feelings of antipathy towards any of the likely candidates. Indeed, I liked and respected them all. (Still do, for the avoidance of doubt!)

So I was starting from a clean slate. But then I read an article by Ed Balls in the Guardian which set out why we had lost the election and how he felt we'd lost touch with our voters over the years. "They thought we weren't on their side any more," he wrote. And I thought, to use a phrase that is already becoming well worn: "He gets it."

I then met with Ed, for a long chat, and that same phrase kept coming into my mind. He gets it. He "gets" what people were saying to me on the doorstep in the election campaign. He understands why the aspirational working class, who we fought hard to win back from the clutches of Thatcher in the early days of New Labour, had started deserting us in droves, and, more importantly, he understands why and how we need to win them back.

I also liked his focus on bread-and-butter issues, and his ability to communicate like a "normal" person. He didn't talk in vague buzzwords, or as if he was addressing a Fabian seminar (or Progress or Compass, to keep things even-handed!). He talked about real issues, and real people, and real communities, not an abstracted version of those things. And his instincts on many of those issues were right.

And, of course, he's intelligent and experienced and decisive and strong. All the qualities we need in a leader. Some say he's too combative, and it's clear that of all the shadow ministers he is going to thrive in opposition. He's been the first to take the fight to the Tories.

Yes, he gets far more flak from them than other leading Labour politicians, but I think he should wear that as a badge of honour. We need a leader who is robust in defence of Labour's legacy, and strong in his challenge to those who seek to destroy it with their cuts.

But we also need someone who will lead Labour back into government. Someone who has learned the right lessons from the past 13 years and from really listening, properly listening, to what voters are saying. Ed has already started on that journey.

He fought a tough campaign in his new constituency, and has had hundreds if not thousands of those "on the doorstep" conversations. It's why he gets it -- because he gets them: his people, his voters. He's tough enough not to pander to people if he thinks they're wrong. He's principled enough not to take up false positions in the hope of personal advantage. But at the same time he realises that the ordinary voter matters.

It would be very easy in opposition to embark on a period of navel-gazing, to turn inwards, to publish pamplets and hold seminars, to talk about the voters instead of talking to them. But it would be wrong to do that. We need to start the fightback now: to expose the new government with vigour and determination; to present a coherent alternative; and to reconnect with our lost voters. And I think Ed's the person to do that.

Kerry McCarthy is MP for Bristol East. She blogs here,and can be found on twitter as @KerryMP

Kerry McCarthy is the Labour MP for Bristol East and the shadow foreign minister.

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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.