Blair does Miliband no favours

Former prime minister backs the coalition's NHS and education reforms.

Tony Blair used to joke: "This has been my worst week until the next one." But after Ed Miliband's worst week since he became Labour leader, Blair does Miliband few favours in his interview in today's Sun.

The former prime minister offers his clearest endorsement yet of the coalition's public service reforms and implies that Labour under Miliband is "pinned in its ideological past". Blair says: "I think some of the technical aspects of reform - competition in the NHS, putting the patient first, breaking up the traditional state school system in favour of academies and trust schools - these were things we started."

As Andy Burnham recently noted in the Times (£), Michael Gove's successful attempt to portray himself as the "torchbearer for new Labour's education reforms" is one of the reasons why his agenda has proceeded at breakneck pace. The endorsement of "The Master" himself (as several Tory cabinet ministers refer to Blair) will only further embolden the Education Secretary. When Blair declares, "I wanted to give to you full-on New Labour", some in the coalition will reply: we have.

Unlike Miliband, who memorably declared that the "The era of New Labour has passed", Blair insists, with messianic fervour, "the concept can't possibly be over because the concept isn't time related". Like Kim Il-sung, one senses, Blair intends to govern from beyond the (political) grave.

As before, Blair gives Miliband his "full support" but adds the rider that Labour will only win "if it fights from the centre", the implication being that Miliband has vacated that hallowed ground. All the same, it would be understandable if the former PM were frustrated at a man who declared that New Labour was dead but who conveniently borrows from the Blair playbook.

In a speech to business leaders in October, Miliband flooded his text with references to New Labour's support for wealth creation. In his speech on responsibility this week, he even quoted the man himself:

Tony Blair once said he wanted a country "where your child in distress is my child, your parent ill and in pain is my parent, your friend unemployed or homeless is my friend; your neighbour my neighbour. That is the true patriotism of a nation." This patriotism is all around us. We see it every day.

But if ever proof were needed that Blair sees Cameron, not Miliband, as his "heir", today's interview supplies it.

George Eaton is political editor of the New Statesman.

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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.