Israel's policy is an invitation to disaster

The country needs to remember that self-defence is not the same as smart defence.

So much has changed in the Middle East in the last couple of years. But it is uncanny how the events of the last week in Gaza have echoed the last war in Gaza – in 2008. Then, as now, US elections were recently behind us, Israeli elections were on the horizon (then Binyamin Netanyahu was the challenger, though, as now, Ehud Barak was Defence Minister), and the conflict was not predicted by the experts. Then, as now, the debates about "proportionality" were an offence to our intelligence. There is another parallel. After the killing and shelling is over, both Israeli and Hamas leaders will think they have won. In the Middle East, history repeats itself first as tragedy, and then as tragedy.

Labour shadow foreign secretary Douglas Alexander was ahead of the government in the UK in calling for a ceasefire, and for the UN Secretary General to visit the region to broker one. It is an irony that the world is holding its breath for the diplomatic effort – and restraint – of President Morsi in Egypt for the ceasefire that could save lives. The contrast with 2008, when President Mubarak was alleged by Israeli politicians and thinkers to be privately supportive, is striking.

In 2008, the phrase of the moment from the Israeli government in respect of rocket attacks was "intolerable". And if you visit Sderot, and talk to people there, life under the shadow of rocket attacks is miserable. But self-defence is not the same as smart defence. Certainly not if it compounds the problem. And if you believe that the fundamental problem for Israel is the diminishing prospect of an independent, viable, contiguous (West Bank plus Gaza) Palestinian state, whose creation triggers the normalisation of relations with the whole Arab world as per the Arab Peace Initiative, then the resort to war in Gaza is dangerous in at least three ways. The loss of life and property fuels hatred. The bombing marginalises the Palestinian Authority, and its President, who are Israel’s notional negotiating partners. And it entrenches the separate legitimacy, authority and status of the "government of Hamas" (apparently Ehud Barak used this phrase) in Gaza. It only makes sense if a two-state solution is dead and buried.

In 2012, the war probably also complicates the drive to build an effective coalition to heave Assad out of power in Syria, which in turn strengthens Iran. Little wonder a much decorated Israeli military chief, Efraim Halevy, wrote in the Financial Times yesterday about Israel needing a strategy not a war.

The truth is that the policy of "Gaza last" – pretend it doesn’t exist, ignore the political and socioeconomic realities on the ground, wish Hamas away – is an invitation to disaster. The policy of siege has funded Hamas through the tax they impose on the transfer of goods through the tunnels, while it has held back the people from the economic and social fulfillment that so many fervently seek. (In that context, note the promise of $250m for reconstruction from Qatar just a couple of weeks ago). Neither siege nor bombing is going to topple Hamas. In fact, Israel depends on Hamas to exercise security control in Gaza, and control the rockets from Islamic Jihad and other more radical groups. Egypt needs Hamas to control the border into Sinai, where various extreme groups want to mount attacks on Israel.

I sincerely hope that further loss of life is averted. Foreign policy is meant to be about stopping people killing each other. But there needs to be more. Without radical thinking, the two-state ideal will be gone – if we haven’t passed the point of no return already.

That means Palestinian politics needs to be reconstituted, across the West Bank/Gaza divide. The global consensus on what a two-state solution means – 1967 borders etc – needs to become the parameters around which negotiations are structured. The Arab world, led by a newly pivotal Egypt, needs to be played in (it is not properly represented by the Quartet). And to repeat something I tweeted last week (and I noticed John McCain mused about this too), President Obama needs his own Presidential envoy, and who better than Bill Clinton. Some people thought this was frivolous. It is deadly serious.

In January 2009, I spent three days at the UN authoring the peace resolution. Its central promises – stop the flow of arms and open the border crossings – have not been fulfilled. There are no winners from that.

This piece originally appeared on David Miliband's blog.

 

A Palestinian man inspects a damaged building following overnight Israeli air strikes on the southern Gaza Strip town of Khan Yunis. Photograph: Getty Images.

David Miliband is the  President and CEO of the International Rescue Committee
He was foreign secretary from 2007 until 2010 and MP for South Shields from 2001 until this year. 

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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.