Could Osborne's mortgage scheme be used to buy second homes? He doesn't know

Chancellor unable to say whether the rich will be able to get government support to buy second or third properties.

George Osborne's new mortgage guarantee scheme ("Help to Buy") garnered him plenty of favourable headlines from Fleet Street but is the Chancellor on top of the detail? Asked this morning on the Today programme whether the £12bn scheme, which will underwrite mortgages for buyers with deposits of between 5-20 per cent, could be used by the well-off to buy second (or third) homes worth up to £600,000, Osborne was unable to say. The Chancellor made it clear that this was not the intention but would only say that he was "working with the industry". 

The mortgage market is an extremely complex thing. The intention of the scheme is absolutely clear, which is that it is for people who want to get their first home or have a home and want to move to a bigger home, because perhaps they have got a bigger family. We are working with the industry to get a scheme that works.

The Treasury has issued a list of those properties that will not eligible for support, including buy-to-lets, but it makes no mention of second homes. Labour has been quick to pounce on the omission, noting that Osborne was unable to deny that the new scheme "will allow wealthiest to buy second homes with govt support". Ed Balls's special adviser Alex Belardinelli quipped that they could use next month's "millionaires' tax cut" to do so. 

Lib Dem peer Lord Oakeshott (Vince Cable's representative on earth) has also responded, urging Osborne to "say no now". If he wants to shut down an encouraging Labour line of attack, the Chancellor would be wise to take his advice. 

Update: Following Osborne's refusal to confirm that second homes will be exempt, Ed Balls has gone on the attack, declaring that the government "is basically saying that if you’ve got a spare room in a social home you’ll have to pay the bedroom tax, but if you want a spare home we’ll help you buy one."

Here's the statement in full: 

Not only is George Osborne pressing ahead with a tax cut for millionaires it now seems that his mortgage scheme will help people, no matter how high their income, to buy a subsidised second home worth up to £600,000.

The Government is basically saying that if you’ve got a spare room in a social home you’ll have to pay the bedroom tax, but if you want a spare home we’ll help you buy one.

Is the Government really going to give millionaires a tax cut averaging £100,000 and then give them a taxpayer guarantee if they use that money as a deposit on a house - a second home or even a home to buy to let? Not just tax cuts for millionaires but subsidised mortgages for millionaires.

Surely people struggling to get a mortgage and those who want to own their first home must be the priority for help, not the small number who can afford to buy a second one. We will only tackle the housing crisis and help first time buyers if we finally build the new affordable homes we have said should be at the heart of any proper plan for jobs and growth.

This more of the same Budget stuck with a plan that is completely failing on growth, living standards and the deficit, but the one new thing George Osborne announced is already unravelling.

George Osborne leaves number 11 Downing Street in central London on March 19, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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My latest Brexit worry? What will happen to our footballers

My week, from why we should “keep on running” to mansplaining in the Commons.

It’s a funny old game, politics. Just when you think you’ve got your head round the myriad consequences of the Brexit vote, yet another one springs to mind. This week, I stumbled upon another sector in which Britain leads the world that will be thrown into uncertainty by Brexit: football.

The background of this moment of clarity is that I’ve been trying to rescue a youth centre in my constituency that the council can no longer afford to run. Thankfully, the brilliant New Ferry Rangers want to take it over as their clubhouse. I tell the chair of the FA, Greg Clarke, about our plans.

In doing so, I realise that the European Union’s competition rules apply to the beautiful game, just as they do to every other business sector in the UK. In practical terms, the absence of these continental rules opens up the possibility of changes to who can play, own and broadcast our wonderful yet expensive national game.

“Will Bosman still apply?” a colleague asks me with relish, referring to the 1995 European Court of Justice ruling that allows EU footballers to transfer easily from one club to another. Who knows? Who knows who knows?

 

Three lions on the shirt

The football dilemma is a microcosm of the wider immigration issue. Some imagine that by barring foreign talent from our shores, we will advantage British-born players. If fewer foreigners are allowed to play and English lads get more playing time in the Premier League, perhaps leaving the EU might result in the long-wished-for success for the England national team?

Unfortunately, it’s not as simple as that. If you don’t have the skills to play alongside the best in the world, you probably don’t have the skills to beat the best in the world. As the Spanish La Liga and the German Bundesliga have shown, there is no incompatibility in allowing league teams to source great players from around the world and still having your home-grown stars come together to win international tournaments.

The most important intervention is to enable your people to develop the skills that they need to compete. This is as true for football as it is for everything else.

 

Hammond’s gilt trip

It’s Treasury questions in the House of Commons this week, and I want to ask about the cost of British government debt, which dwarfs even the monstrous levels of cash in modern football. It is a bitter irony that, following the global financial crisis that helped the Tories win the 2010 general election, the slow-burn economic crisis that the party has since brought about with David Cameron’s botched referendum has received scant attention. (Particularly in comparison with the Westminster lobby’s anxiety about Labour’s record on debt and the deficit.)

British debt owned by foreign investors has now breached the high-water mark of £500bn, its highest-ever level. As the value of sterling tumbles, we can only wonder what risks may lie ahead, as our creditors watch the value of these investments fall.

The Chancellor responds to me by explaining how gilts work. He doesn’t answer my question at all, however, leaving us all to wonder what horrors the Budget in March might bring. It’s a lovely reminder that I am not immune to mansplaining, even in the House of Commons, and that we call it “parliamentary questions” and not “parliamentary answers”.

It’s also a demonstration of how little economic policymaking is going on. The great nation of John Maynard Keynes, the inventor of global economic institutions that have steadied the world, is now reduced to skulking around Europe, seeking an embarrassing exit from the union that cemented his postwar peace settlement. Once, we led in Europe. Now we follow as the hard right barks its orders.

 

Trading down

Listening to Theresa May’s Brexit speech later on Tuesday, my heart sinks again. She puts paid to the idea that we might stay in the single market. Reducing immigration is her life’s work, apparently. It is a grave error and one that must be resisted. The biggest challenge to our country is not that people are prepared to come to work here and pay their taxes here. New Britons deserve our respect.

 

A sporting chance

On Wednesday, I meet the Speaker to discuss the ongoing work to build on the legacy of our friend Jo Cox.

Through these hard days, I am reminded constantly of two things. First, the words of her brilliant husband, Brendan, who said that we will fight the hate that killed her. Jo never gave up on a monumental challenge, and all our kids need us not to lose heart now. Second, that my experience of Jo was that she focused on the challenge ahead and never wallowed. She was the best of us, and I wish I were more like her.

One thing that Jo and I had in common was that we took part in the annual House of Commons tug of war. Unlike the Premier League, we women of the political world cannot boast world-beating talent in our sport. But we demonstrate the spirit of This Girl Can, Sport England’s campaign to empower women in their sporting endeavours (which returns to our screens soon).

 

Making tracks

While we wrestle in politics with the horrific events that happened last year and the risks ahead, I am trying to demonstrate the This Girl Can spirit and keep up with my physical activity. I would love to be better at football, the sport I adore, but there are not that many opportunities to play, given the parliamentary timetable. So I get up early for a jog along the Thames and tell myself that going slowly is faster than never going at all. Without a doubt, for progressives right now, “Keep on Running” is our theme tune.

Alison McGovern is the MP for Wirral South (Labour)

Alison McGovern is Labour MP for Wirral South.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era