Agent Osborne goes rogue

Is the Chancellor an accelerationist sleeper-agent sworn to provoke a socialist revolution?

Nikolai strolled into the stuffy office where the older man stood waiting behind a desk which had stood in the same spot back in Stalin’s day. The older man – Colonel Rakhmetov – gestured him brusquely to a seat in front of him, sat down himself, looked up and said “Sit”.

The Colonel glared at him. “The plan for Agent Gideon began under Brezhnev. Do you have any idea of the resources required to place a mole at the heart of the British establishment, trained from birth to further the cause of Communism? So can you tell me what, precisely, is happening in that miserable backwater right now?”

Nikolai took a deep breath. He was new to this world of hidden communist sleepers, left in place as the KGB became the FSB and knew he had to tread carefully around an officer who had earned his pips back when the letters CCCP still struck such fear into the heart of capitalists that they’d made concessions to the working class.

“Sir, you are familiar with the works of Nikolai Chernyshevsky?”

The wrong thing to say. The Colonel ran nicotine-stained fingers through his hair, glared. “I am. The originator of the doctrine of ‘the worse, the better – that only through a continual worsening of the conditions of the proletariat can they be motivated to throw off their chains. Author of the original “What is to be done?” a work that so inspired Lenin that he named his own book after it. What of it?”

“Well agent Gideon has rather taken the doctrine to heart. Rather than gradually introduce Socialism, as per his original instructions, he’s trying to incite the British working class to revolution. Thus, although government debt interest accounts for only a shade over 3% of UK GDP, he’s inflicted growth-destroying fiscal tightening of more that amount on the country already, with more to come. And to ensure maximum damage, he’s taken the bulk of the money from public sector investment – which he’s halved.It’s killing two birds with one stone sir. You kill economic growth and you also reduce the ability of the country to grow in future.”

The Colonel’s brow wrinkled. He disapproved of initiative, which in his day had meant replacing a long retirement by the Black Sea with an early but short one by the White Sea.

“Yes so I heard. And the riots were surely promising, even if class-consciousness wasn’t entirely obvious in the raiding of sportswear retailers over government ministries and barracks. But now he’s run out of control. But wouldn’t it be more effective to just bankrupt the country by running up debt?”

“Not really sir. All the money in the UK is crying out for a home, so interest rates are extremely low. And the average maturity of the debt is 13 years, so it’s almost impossible to provoke a liquidity crisis – I think our other agents in the banking sector are much more promising in that respect. And without getting completely into the realms of fantasy, it’s quite hard for the government to get rid of a huge amount of extra borrowing without causing some economic growth. But the cuts are excellent for provoking discontent with the public at large.”

“Interesting. Sounds like things are going well. So why did you request this meeting?”

“Well sir, to be frank, it looks like Agent Gideon is going rogue. He’s overreaching, and it can only lead to his downfall. He’s been emphasising the privilege of the ruling plutocracy” – Nikolaj wondered if he should spit, decided against it – “by cutting taxes that only apply to the very elite, insisting on defending the privileges of the bankers who brought the country to its knees. Only someone with his training in Socialist theory would be quite so adept at underlining the injustice and contradictions of capitalism, and it’s only a matter of time before British Intelligence catch on.”

“Yes, I can see why this is an issue, and you were right to come to me-”

“Excuse me sir, but that’s not the worst of it. His latest scheme seems intent on provoking revolution this year, and I fear he’s overreaching. It’s called Help to Buy. Essentially it puts the government balance sheet – which he’s promised can’t be used for even essential infrastructure – to work to boost house prices without really increasing the number of houses being built. So the government can take losses, but all the benefit accrues to the homebuyer.”

“So he pushes up house prices in a country with already expensive prices, increases the risks to the banking sector, pushes more people into loans they can’t afford and spends money without creating any real benefits to society?”

“Yes sir. He did try to get it extended to buy-to-let landlords, but even the Treasury spotted that one. But it will make a nice subsidy for second homes for the rich.”

The Colonel frowned, but paused no more than a second. “We’ll risk it. This is the best chance we have to make England the vanguard of the new socialist revolution. You’re overruled. let Agent Gideon proceed.”

This piece originally appeared on Morski's blog, and is reposted here with permission.

A man resembling Agent Osborne, pictured with Josef Stalin, date unknown. Image: Getty Images/Alex Hern

Pawe? Morski is a fund manager who blogs at Some of it was true…

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.