Economy 10 October 2013 Osborne reveals the true aim of Help to Buy: to inflate house prices "Hopefully we will get a little housing boom and everyone will be happy as property values go up," the Chancellor reportedly told the cabinet. Sign up for our weekly email * Print HTML Mervyn King once memorably complained of David Cameron and George Osborne's "tendency to think about issues only in terms of politics, and how they might affect Tory electorability". Rarely has there been a better example of this than the Help to Buy scheme. While Cameron and Osborne publicly state that the aim of the policy is to help first-time buyers, their real aim is to create a pre-election feel-good factor among Tory-leaning homeowners by inflating prices. With the cap for support set at a £600,000 (the average house price is just £172,000), Help to Buy will act as a giant state subsidy for homeowners seeking to trade up or borrow against the value of their property. Today we learn that Osborne has told the cabinet as much. The Independent's Andrew Grice quotes the Chancellor as saying: "Hopefully we will get a little housing boom and everyone will be happy as property values go up." This is undoubtedly smart politics; 45% of homeowners voted Conservative in 2010 and are more likely to remain loyal to the party if they're feeling flush by 2015. But it is terrible economics and a policy that no one genuinely committed to expanding home ownership should support. Even while allowing some to make it onto the ladder, the scheme risks blocking the route for others by further widening the gulf between prices and earnings. There is much that the government could do to ease the housing crisis, including increasing supply by allowing councils to borrow to build (as Vince Cable has proposed), penalising developers who sit on unused land, and improving conditions for private tenants. But none of these objectives are aided by an electoral bung less aimed at delivering more homes than more votes. › With or without Ed Miliband’s energy price freeze, the lights could soon start going out George Osborne leaves 10 Downing Street on October 7, 2013 in London. Photograph: Getty Images. George Eaton is political editor of the New Statesman. Subscribe from just £1 per issue More Related articles Forget the flat caps - this is what Labour voters really look like Shock Wales YouGov poll shows that Labour's Ukip nightmare is coming true Donald Trump wants to terminate the Environmental Protection Agency - can he?