Tories squabble over gay marriage

No tax break for married couples in next month's Budget.

It has emerged that the government is not going to introduce tax breaks for married couples in next month's Budget, and the news has reignited Tory anger over Cameron's support for gay marriage.

The two issues are connected in the minds of Tory backbenchers, as they see it as a matter of Cameron's priorities on gay vs heterosexual marriage. There had been speculation that Cameron would bring in married tax breaks in order to appease party members who are anti-gay marriage. 

The government is to vote on gay marriage next week. 

This comes as a ComRes poll for the Daily Telegraph suggests that one in five Conservatives would "definitely not" vote for the party in 2013 if the Government continues with plans for same sex marriage, and The Times reports that members are leaving the party "in droves" over the issue. According to The Times, those quiting number up to 100 in some seats. It quotes Tory MP David Burrowes saying: "There's serious unrest in the grassroots. You cannot avoid the fact that the troops are unhappy. People are drifting away."

According to the FT, at least half the party's backbenchers will "revolt" against the move - although, as my colleague George Eaton wrote

Should Conservative cabinet ministers vote against equal marriage, it will not qualify as a rebellion because David Cameron has offered a free vote to his MPs.

However, the split within the party over the vote will heighten speculation over a 2015 leadership change for the Tory party. As George Osborne said, gay marriage acts as a litmus test for how well efforts to modernise the party are working, and the widening gulf between members suggests a good portion of the party is a long way behind.

Tory anger over gay marriage. Photograph: Getty Images
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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.