Would Cameron allow Tory cabinet ministers to vote for EU withdrawal?

Faced with a split party, Cameron could learn from Harold Wilson and suspend collective cabinet responsibility for the referendum campaign.

Britain would not "collapse" if it left the EU, David Cameron declared in his interview on the Today programme this morning. It was a concession to those in his cabinet who believe that the UK should make it clear that it is prepared to withdraw if it fails to secure significantly changed terms of membership. One of those ministers, Eric Pickles, told Radio 5 Live's Pienaar's Politics last night: "If it's in our firm national interest that we should remain in the EU – and I sincerely hope that is the case – then we should stay. But we shouldn't stay at any price." Michael Gove has similarly argued that Britain must threaten to leave the EU in order to achieve a successful renegotiation.

The danger for Cameron (who remains a genuine supporter of British membership) is that unless he is able to repatriate substantial powers from Brussels, some cabinet ministers will conclude that EU membership is no longer in Britain's interests. In this week's Spectator, James Forsyth reported that there are "at least nine Cabinet members" who would be inclined to vote "out" in a referendum if Cameron only proves able to secure minor concessions such as the exemption of the NHS from the Working Time Directive and restrictions on immigration from the EU. Confronted by what Forsyth says would be the biggest Conservative split since the repeal of the Corn Laws, how could Cameron respond?

It is worth recalling how the last (and only) government to hold an EU referendum - Harold Wilson's Labour administration in 1975 - dealt with a comparable problem. With europhiles like Roy Jenkins on one side and eurosceptics like Tony Benn on the other, Wilson took the unprecedented step of suspending collective cabinet responsibility in order to allow his ministers to support either side in the campaign. Seven Labour cabinet ministers - Benn, Barbara Castle, Michael Foot, William Ross, Peter Shore John Silkin, Eric Varley - went on to unsuccessfully argue for withdrawal from the EEC (the vote was 67-33 in favour of membership).

As I wrote earlier, it is wrong to assume that a referendum is inevitable when Cameron's strategy is entirely dependent on a Conservative majority at the next election (an outcome that looks increasingly unlikely). But on the assumption that one does take place, the most elegant way for Cameron to respond to a split party may be to invoke the Wilson precedent.

Iain Duncan Smith, who voted against the Maastricht Treaty that created the EU, is one cabinet minister likely to favour withdrawal. 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.