Why Miliband would be foolish to match the Tory EU referendum pledge

Such a clear U-turn would cement a corrosive narrative that could prove far more damaging to his prospects of becoming Prime Minister – that of weakness.

Those of a nostalgic bent might find the enduring ability of 'Europe' to cause such disruption in British politics somewhat reassuring. After all, it has been a reliably consistent source of crisis for both Labour and the Conservative Party for nearly 40 years. Labour’s European troubles are often forgotten but the party was at least as exercised over Europe in the 70s and early 80s as the Conservative Party has been since the 90s. Indeed, the last referendum on Britain’s EU membership nearly split the Labour Party in 1975, while the party eventually did split, in large part over Europe, in 1981.

Now it seems Labour’s turn to be the party engaging in undignified convulsions over Europe has come round again. The Conservatives probably can’t believe their luck.

Incredibly, given the inordinate amount of time spent addressing the issue by all parties, Europe has never registered as more than a blip on the most important concerns of British voters. Even now, at a time when Europe is rarely out of the news and politicians and journalists alike fixate on the future of the UK’s EU membership, just 7% of voters mention it when asked to identify "important issues facing Britain today" (43% mention the economy; 38% immigration) and just 1% identify it as the "most" important.

Put simply, a pre-occupation with Europe is not a useful trait for winning elections (something to which former Conservative leader William Hague’s disastrous 'Save the Pound' campaign of the 2001 election attests).

And yet Labour bigwigs like Ed Balls and Jon Cruddas are convinced that neglecting to match or better David Cameron’s promise of an in/out EU referendum by 2017 could be an election-losing move.

In fact, the opposite is likely to be true. Such a clear U-turn, made in response to pressure from Miliband's (notional) subordinates, would cement a corrosive narrative that could prove far more damaging to his prospects of becoming Prime Minister – that of weakness.

Miliband has refused to match David Cameron’s pledge to hold a referendum in 2017 on the grounds that to do so now would create a long period of uncertainty over Britain’s membership which would be detrimental to British business. The party is committed to retaining the coalition's 'referendum lock', however, meaning that in the event of a further transfer of powers from the UK to the EU, a referendum would automatically be triggered.

This current position is a perfectly reasonable one. Deviating from it would play into the hands of the Conservatives and raise further questions about his competence as a leader. Beyond the leadership issue, there are two other reasons why it’s frankly a lousy idea:

1) It suits Labour to focus on the economy and public services and leave the European issue to the Conservatives. Matching the Tory pledge would cast the Conservatives as a party leading the way on Europe, rather than one that simply cannot help itself from obsessing over an issue that means relatively little to most of the public.

2) The electoral benefits of doing so would likely be negligible – Labour is a pro-European party; voters ready to change their vote based on the offer of an in/out referendum are likely to be voters who want to leave the EU and are thus probably beyond Labour’s reach regardless of its stance. 

There has been some discussion in Labour ranks of calling for a referendum before the next election. Those in favour argue that it would throw the Tories into disarray, while remaining consistent with Labour’s position that a referendum with a long lead time would undermine investment in British business. Such a move would risk charges of rank opportunism but far more importantly would open the door to Labour’s worst-case scenario – a British exit from the EU. Add to that the fact that polls indicate most voters to be in favour of renegotiation, rather than an immediate referendum and it begins to look like a less than astute move.

Ed Miliband should be wary of those who would put so much public pressure on a leader to reverse a position he is known to hold on principle, particularly when, as now, he is vulnerable to charges of weakness and indecision. Calling for a referendum at the Labour conference in September, as some are suggesting, would not look bold in this context, it would look spineless – quite possibly a 'quiet man turning up the volume' moment…

Ed Miliband attends a Q&A session at the Eric Liddle centre on 23 August, 2013 in Edinburgh, Scotland. Photograph: Getty Images.

Richard Mylles is a political analyst at Absolute Strategy Research, an independent consultancy based in London.

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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.