The Treasury select committee is deeply unimpressed by Osborne's Help To Buy scheme

The plan to help first-time buyers is "very much a work in progress", say Andrew Tyrie and colleagues.

For connoisseurs of polite eviscerations, parliamentary select committees are a joy. From Tom Watson grilling the Murdochs to Michael Gove being asked if his special advisers had really described his junior minister as a "lazy incompetent narcissist", they can feature some very unpolitical plain speaking.

Under Conservative MP Andrew Tyrie, the Treasury select committee has often been a little more independent-minded than the government would like. Its new report into the effects of the Budget looks at the flagship "Help to Buy" scheme, and is a masterpiece of quiet denunciation.

Here's how the Treasury describes the initiative on its website:

Help to Buy is made up of two schemes – “equity loan” where the Government will loan you up to 20% of the value of your new build home and “mortgage guarantee” where lenders will be incentivised to make more mortgages available for people with small deposits.

The Treasury Committee has spotted a number of problems with this idea, and helpfully summarised them alongside Tyrie's thoughts, next to its full report. It describes the scheme as "very much work in progress. It may have a number of unintended consequences."

The first problem is with the structure of the scheme itself. The report notes:

It is by no means clear that a scheme, whose primary outcome may be to support house prices, will ultimately be in the interests of first time buyers. This is the group the Government says it wants to help.

. . .

The lack of clarity over whether the mortgage guarantee scheme will be open to those wishing to purchase a second home is concerning on two grounds. First, it is a reflection of the need to think schemes through carefully before announcing them. Second, whilst the Committee is aware of the complexity which may come with an exclusion, we struggle to see the rationale for the taxpayer to stand behind loans for people wishing to own a second property, especially given that the Chancellor has repeatedly stated that the scheme is primarily designed to help people onto the property ladder as well as those who wish to move property.

The issue of second homes has dogged the policy since the start, with government ministers offering differing opinions on whether it would cover them. The sentence I've bolded is one of several waspish reflections on the fundamental soundness of the plan.

Here's the second stand-out section:

The mortgage guarantee scheme also makes the Government an active player in the mortgage market. The Committee is concerned that the Treasury now has a financial interest in maintaining house prices to limit losses to the taxpayer.

Of course, there are already many reasons why a government would want to maintain house prices - it is not popular politics to plunge voters into negative equity, or make home-owners feel that an asset on which they felt they could rely has fallen in value. But given that high prices (driven by lack of supply in popular areas) are one of the factors locking first-time buyers out of the market, such a scheme places the Treasury in a very peculiar position.

At the Guardian, Nils Pratley analyses the report and notes:

The real problem in the housing market is the lack of new homes. To attempt to stimulate more building by subsidising mortgages and forcing up house prices is a bizarrely roundabout approach. It is long-term, at best. "If the government's priority was housing supply, its housing measures ought to have concentrated there," says the committee. Quite.

A pigeon on a rooftop. Photo: Getty

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

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A global marketplace: the internet represents exporting’s biggest opportunity

The advent of the internet age has made the whole world a single marketplace. Selling goods online through digital means offers British businesses huge opportunities for international growth. The UK was one of the earliest adopters of online retail platforms, and UK online sales revenues are growing at around 20 per cent each year, not just driving wider economic growth, but promoting the British brand to an enthusiastic audience.

Global e-commerce turnover grew at a similar rate in 2014-15 to over $2.2trln. The Asia-Pacific region, for example, is embracing e-marketplaces with 28 per cent growth in 2015 to over $1trln of sales. This demonstrates the massive opportunities for UK exporters to sell their goods more easily to the world’s largest consumer markets. My department, the Department for International Trade, is committed to being a leader in promoting these opportunities. We are supporting UK businesses in identifying these markets, and are providing access to services and support to exploit this dramatic growth in digital commerce.

With the UK leading innovation, it is one of the responsibilities of government to demonstrate just what can be done. My department is investing more in digital services to reach and support many more businesses, and last November we launched our new digital trade hub: www.great.gov.uk. Working with partners such as Lloyds Banking Group, the new site will make it easier for UK businesses to access overseas business opportunities and to take those first steps to exporting.

The ‘Selling Online Overseas Tool’ within the hub was launched in collaboration with 37 e-marketplaces including Amazon and Rakuten, who collectively represent over 2bn online consumers across the globe. The first government service of its kind, the tool allows UK exporters to apply to some of the world’s leading overseas e-marketplaces in order to sell their products to customers they otherwise would not have reached. Companies can also access thousands of pounds’ worth of discounts, including waived commission and special marketing packages, created exclusively for Department for International Trade clients and the e-exporting programme team plans to deliver additional online promotions with some of the world’s leading e-marketplaces across priority markets.

We are also working with over 50 private sector partners to promote our Exporting is GREAT campaign, and to support the development and launch of our digital trade platform. The government’s Exporting is GREAT campaign is targeting potential partners across the world as our export trade hub launches in key international markets to open direct export opportunities for UK businesses. Overseas buyers will now be able to access our new ‘Find a Supplier’ service on the website which will match them with exporters across the UK who have created profiles and will be able to meet their needs.

With Lloyds in particular we are pleased that our partnership last year helped over 6,000 UK businesses to start trading overseas, and are proud of our association with the International Trade Portal. Digital marketplaces have revolutionised retail in the UK, and are now connecting consumers across the world. UK businesses need to seize this opportunity to offer their products to potentially billions of buyers and we, along with partners like Lloyds, will do all we can to help them do just that.

Taken from the New Statesman roundtable supplement Going Digital, Going Global: How digital skills can help any business trade internationally

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