Why Help To Buy could be bad politics as well as bad economics

Osborne hopes "everyone will be happy as property values go up" but a new poll shows that 66% of the public don't want prices to rise.

Even before the effects of the second part of George Osborne's Help To Buy scheme have been felt, house prices have already reached a record high. The ONS's index today shows that the average price of a UK property now stands at £247,000, the highest level on record. Wages, by contrast, are not expected to rise in real-terms until 2015 and will not regain their lost value until 2023. In these circumstances, launching Help To Buy is the economic equivalent of throwing fuel onto the fire. With the cap for support set at £600,000, the scheme will act as a giant state subsidy for homeowners seeking to trade up or to borrow against the value of their property.

That, of course, is entirely the point. As Osborne reportedly told the cabinet recently, "Hopefully we will get a little housing boom and everyone will be happy as property values go up." But while Help To Buy is certainly bad economics, it's not even clear that it's good politics. A new poll by YouGov for Shelter found that 66% of the public don't want house prices to rise, up from 58% in June. Even more strikingly, more outright homeowners want prices to fall or stay the same than to rise (67-28%), along with most Conservative voters (65%) and most Daily Mail readers (66%). Quite rightly, the experience of the crash and the lack of affordable housing for young people has persuaded the public that inflating another housing bubble isn't a great idea.

If anything might persuade Osborne, the Tories' strategic grandmaster, to think again, it is surely the prospect of losing, rather than winning voters over this issue.

George Osborne delivers his speech to the Conservative conference in Manchester earlier this month. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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If Seumas Milne leaves Jeremy Corbyn, he'll do it on his own terms

The Corbynista comms chief has been keeping a diary. 

It’s been a departure long rumoured: Seumas Milne to leave post as Jeremy Corbyn’s director of communications and strategy to return to the Guardian.

With his loan deal set to expire on 20 October, speculation is mounting that he will quit the leader’s office. 

Although Milne is a key part of the set-up – at times of crisis, Corbyn likes to surround himself with long-time associates, of whom Milne is one – he has enemies within the inner circle as well. As I wrote at the start of the coup, there is a feeling among Corbyn’s allies in the trade unions and Momentum that the leader’s offfice “fucked the first year and had to be rescued”, with Milne taking much of the blame. 

Senior figures in Momentum are keen for him to be replaced, while the TSSA, whose general secretary, Manuel Cortes, is one of Corbyn’s most reliable allies, is said to be keen for their man Sam Tarry to take post in the leader’s office on a semi-permanent basis. (Tarry won the respect of many generally hostile journalists when he served as campaign chief on the Corbyn re-election bid.) There have already been personnel changes at the behest of Corbyn-allied trade unions, with a designated speechwriter being brought in.

But Milne has seen off the attempt to remove him, with one source saying his critics had been “outplayed, again” and that any new hires will be designed to bolster, rather than replace Milne as comms chief. 

Milne, however, has found the last year a trial. I am reliably informed that he has been keeping a diary and is keen for the full story of the year to come out. With his place secure, he could leave “with his head held high”, rather than being forced out by his enemies and made a scapegoat for failures elsewhere, as friends fear he has been. The contents of the diary would also allow him to return in triumph to The Guardian rather than slinking back. 

So whether he decides to remain in the Corbyn camp or walk away, the Milne effect on Team Corbyn is set to endure.

 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.