Werritty "paid to act as Fox's adviser" by wealthy donors

New allegations could be particularly damaging if found to be true.

How many days on the front pages does it take before a politician's career is over? Liam Fox has been weathering the storm so far, but allegations made today will be particularly damaging, if they are proved true.

The BBC is reporting that an anonymous "wealthy backer" of the Defence Secretary has admitted that he and several others raised money to pay for Adam Werritty to act as Fox's adviser.

According to the BBC's political editor, Nick Robinson, this person said that the group of donors shared Fox's ideological perspective. The source claimed that although the group did not have specific defence interests, they paid Werritty because he could be trusted to encourage support for Eurosceptic, pro-American and pro-Israeli policies -- unlike civil servants.

To an extent, this account conforms to that given by Werritty; that his 18 trips abroad were funded by ideologically sympathetic philanthropists. The Guardian reports that Werritty has admitted to the inquiry that he may have "unintentionally misled" some business associates about his relationship with Fox, allowing them to think he was an official aide.

So, it appears that this group of wealthy backers existed and funded Werritty. The key question is how much Fox knew. If the donors were explicitly paying Werritty to act as Fox's adviser, as the BBC's report implies, it will be increasingly difficult for Fox to continue to deny all knowledge of impropriety.

Having an adviser paid for by undeclared donors is almost certainly a breach of the ministerial code and so if this allegation is found to be true, it would be difficult for Fox to continue in his role.

 

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for 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.