Cameron's EU referendum may never happen

It is odd to speak of an EU referendum as inevitable when few believe the Conservatives will win a majority at the next election.

Yet again this morning, David Cameron was interviewed about a speech on the EU he still hasn't given. Asked on the Today programme whether the over-hyped address had been completed, Cameron said it was "finished and ready to go" (subsequently amending this to "largely finished").

Once again, he said that he would seek to reach a "new settlement" with the EU before seeking the "consent" of the British people for the changes, a clear promise of a referendum. In his speech, which is now due to be delivered on 23 January (having been pushed back from 22 January in order to avoid clashing with celebrations to mark the 50th anniversary of the Élysée Treaty between France and Germany), Cameron will say that after the next election, a Conservative government would seek to repatriate significant powers from the EU before offering the voters a choice between the new terms and withdrawal.

As such, a referendum is now viewed by most as inevitable. Yet this pledge is dependent on an outcome that increasingly few believe is likely: a Conservative majority at the next election. A reformation of the coalition would likely scupper any plans Cameron has to bring back major powers from Brussels. In addition, it is unclear how Cameron will respond if he proves unable to secure the changes he wishes to see. This morning, he simply told John Humphrys: "I'm confident we will get the changes that we want, we'll have a new settlement and then we'll put that to the British people." Given the obstacles to a referendum, it is surprising how many now speak as if it is a certainty.

Neither Labour nor the Liberal Democrats will immediately match Cameron's pledge to hold an EU referendum, both arguing that it makes no sense to discuss a public vote until the eurozone crisis has been resolved. However, it is also true that they are unlikely to allow Cameron to go into the 2015 election as the only party leader willing to offer the public a say on Europe. The Lib Dems have previously supported an in/out referendum, while senior Labour figures, including Jon Cruddas and Jim Murphy, both argue that a vote should be held at some point in the future. In all probability, then, an EU referendum is coming. But no one should assume it will be Cameron who holds it.

David Cameron speaks during a press conference at the EU headquarters on December 14, 2012 in Brussels. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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.