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.

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.

George Osborne leaves 10 Downing Street on October 7, 2013 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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