The Tory left is in crisis - but no one in the party cares

Where are the successors to one nation giants like Michael Heseltine, George Young and Chris Patten?

As George Osborne announced huge cuts to benefits for the mentally ill and the disabled, Andrew Mitchell clung embarrassingly to power before resigning, and Iain Duncan Smith courted controversy with proposals to slash benefits for families of more than two children, we witnessed the Conservative Party unleash its pre-general election rallying cries. And yet, as party direction sharpened, giants of the Tory "one nation" tradition rose to remind us of an alternative Conservative vision. George Young arrived honourably back into cabinet, while Chris Patten brushed Maria Miller’s criticism of the BBC aside as ably as he once swept voters into his party’s fold. This week, Michael Heseltine went so far as to suggest that there is economic and civic potential in the regions and that it should be backed by a decentralised state entrepreneurialism. Are we witnessing a renewal of the Tory left or its last hurrah?

George Young, for example, was once Conservative minister for inner cities and, for 23 years, the MP for the ethnically diverse urban seat of Ealing Acton. He once served in the cabinet of Lambeth Council.  A Heseltine ally, in government he had a powerful sense of the need for policy to address poverty as much as unleash economic growth. His generation of Tories was as familiar with the great conurbations of our country as the modern Conservative Party has become unfamiliar with them. Indeed, among this cohort of parliamentarians was Virginia Bottomley who, as a qualified social worker, is the last Conservative frontbencher to have had a professional career in the caring or voluntary sectors. A Conservative government with social workers on its frontbench now seems utterly alien from the occasional summertime volunteering that passes as "a commitment to social action" for the party’s present parliamentary selection process. Like Young, Heseltine and Patten, Bottomley is a supporter of the moderate Tory Reform Group, the classic one nation ginger group.

But in the wider ministerial ranks, only Foreign Office minister Alastair Burt stands trenchantly in the tradition from which Young, Bottomley, Patten and Heseltine emerged.  Among younger Tories, perhaps only Swindon’s high church Robert Buckland MP and Richard Chalk, a former party CEO and sometime head of Ken Clarke’s leadership campaign, come close.  

Meanwhile, the very English "one nation" idea that state power can be used to back growth and build social inclusion is simply "Gaullist" according to Osborne devotee and FT journalist Janan Ganesh, "paternalistic" to some ministers and, in the view of the BBC’s Nick Robinson,  "not acceptable" to "Thatcher’s children", who now hold sway under Cameron. But "small tent" parties struggle to collect voters who have seen their neighbours break as factories close and community health provision evaporates. The centralising zeal of Duncan Smith’s apostles provokes mirth among  elected councillors of even his own party. There is hardly a Conservative local government leader that does not think they could get youngsters back into work faster than any scheme invented by the DWP or BIS in London. Tacking away to the right, Duncan Smith, Osborne and those like them , leave open huge swathes of popular opinion in marginal seats that are not affiliated  to any party but instinctively sense that more could be done, even at a time of fiscal rectitude, as things get tough.

For while Young, Heseltine and Patten remind us of a Conservative Party that was strong in the cities, in Scotland, among the rich and the poor they have lived an average of more than 70 years each. Despite their recent prominence, the fragments of their convictions are now unravelling as a new generation of Conservatives steps forward  beyond Cameron. While this sharpens the Conservative strategy in the run up to the next election, it perhaps explains why even the Prime Minister is now under so much pressure from within.  And why a young Labour leader has been so easily able to park his political tanks all over  the lawns of  the Tory one nation tradition. This is not, then, a moment of renewal  for the Tory left. It is in crisis, and no one in its own party cares.

Francis Davis served as a policy advisor at the Department for Communities and Local Government under both Labour and the coalition government. He is a fellow at ResPublica and previously taught at Oxford and Cambridge.

Michael Heseltine, who published his government-commissioned review of growth policy yesterday. Photograph: Getty Images.
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.