7 Days

No tax back William Hague announced a rethink of the Tories' "tax guarantee", which had promised lower taxes under the next Conservative government. The Tory leader responded to criticism of the guarantee by saying that public spending would take priority over tax cuts in the event of a recession.

Crime rise The new crime statistics to be published on 18 July will show a 3 per cent increase in crime over the past year and a 10 per cent jump in violent crime. Ministers fear that the public is losing faith in the government's ability to secure law and order.

Pension crackdown The government launched an attack on early retirement due to ill health in the public sector in an attempt to cut a £1bn-a-year pensions bill. A report to be published by the Chief Secretary to the Treasury, Andrew Smith, will claim that the system is being abused.

The row is over British Nuclear Fuels Ltd agreed to pay Japan £40m in compensation in a dispute over a shipment of nuclear fuel and also agreed to transport the fuel back to Britain. The row was sparked last September, when BNFL admitted that some of its workers had falsified safety records of reprocessed plutonium sold to Japan from its Sellafield plant.

Aids summit Researchers attending the 13th International Aids Conference in Durban warned that the HIV virus is becoming increasingly resistant to drugs. Clare Short, the Secretary of State for International Development, accused the Catholic Church of being a "burden" in the battle against the disease in Africa.

Correction: In his column last week, Paul Routledge stated that, when Tom (now Lord) Sawyer became the general secretary of the Labour Party, he received a "big pay-off" from his former job with Nupe. Lord Sawyer has asked us to say that he left the union in the normal way, with no pay-off whatsoever.

This article first appeared in the 17 July 2000 issue of the New Statesman, Special Report - Lost souls in the city in the sky

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.