Cameron's EU veto: "conspiracy or cock up?"

The PM is confident because his stance is popular. But some MPs are querying whether the whole thing

The House of Commons was on predictably raucous form for the Prime Minister's statement on last week's European summit. It isn't always a forum in which the best arguments win. Often they are trumped by the most bravura performance, the readiest wit or the exuberance of the backbenches.

On this occasion, the seriousness of the issue just about managed to cut through the roiling theatrics. Cameron pitched his statement soberly, clearly mindful of being seen to revel in the anti-Brussels triumphalism that was bubbling away behind him. He didn't need to worry about sparing Nick Clegg's blushes though. The Deputy Prime Minister wasn't there. Cameron's message was simple enough: the deal on offer wasn't good for Britain, so he didn't sign.

That claim was dismantled by Ed Miliband. Nothing had been vetoed that cannot proceed anyway, no safeguards were secured and all that was achieved was Britain's marginalisation. It wasn't a barnstorming performance, but it had the solid virtue of describing the truth.

The message was reinforced by needle-sharp questions from two former foreign secretaries, David Miliband and Jack Straw, probing the Prime Minister on the detail of what exactly it is that was under threat before last Thursday, and how exactly the threat has now been averted. Cameron couldn't answer.

Outside parliament, though, It doesn't really matter much. The Prime Minister's strongest line was also his most predictable one: would Miliband have signed or not? "You can't lead if you can't decide". It was a neat barb, crafted to reinforce No. 10's central strategic line of attack against the Labour leader -- that he is not a credible alternative PM.

Ultimately, Cameron is confident because his stance is popular. He is casting himself as the PM who finally said "no" to Brussels and, according to opinion polls, it is working.

That domestic political advantage (which has the added benefit of averting a rebellion on his backbenches and diminishing the threat of a Ukip upset in next week's Feltham by-election) has led a number of Labour MPs to query whether Cameron might have planned the whole thing. The theory doing the rounds is that he deliberately tabled impossible demands in Brussels to engineer a veto.

Just before the statement, I spoke to one shadow minister who put the question pretty bluntly. "Is it conspiracy or is it cock up?"

If it is the former, the Lib Dems will have been most royally stitched-up. Perhaps suspicion along those lines is what kept Clegg out of the chamber.

 

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Getty
Show Hide image

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.