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.

Photo: Getty
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Like it or hate it, it doesn't matter: Brexit is happening, and we've got to make a success of it

It's time to stop complaining and start campaigning, says Stella Creasy.

A shortage of Marmite, arguments over exporting jam and angry Belgians. And that’s just this month.  As the Canadian trade deal stalls, and the government decides which cottage industry its will pick next as saviour for the nation, the British people are still no clearer getting an answer to what Brexit actually means. And they are also no clearer as to how they can have a say in how that question is answered.

To date there have been three stages to Brexit. The first was ideological: an ever-rising euroscepticism, rooted in a feeling that the costs the compromises working with others require were not comparable to the benefits. It oozed out, almost unnoticed, from its dormant home deep in the Labour left and the Tory right, stoked by Ukip to devastating effect.

The second stage was the campaign of that referendum itself: a focus on immigration over-riding a wider debate about free trade, and underpinned by the tempting and vague claim that, in an unstable, unfair world, control could be taken back. With any deal dependent on the agreement of twenty eight other countries, it has already proved a hollow victory.

For the last few months, these consequences of these two stages have dominated discussion, generating heat, but not light about what happens next. Neither has anything helped to bring back together those who feel their lives are increasingly at the mercy of a political and economic elite and those who fear Britain is retreating from being a world leader to a back water.

Little wonder the analogy most commonly and easily reached for by commentators has been that of a divorce. They speculate our coming separation from our EU partners is going to be messy, combative and rancorous. Trash talk from some - including those in charge of negotiating -  further feeds this perception. That’s why it is time for all sides to push onto Brexit part three: the practical stage. How and when is it actually going to happen?

A more constructive framework to use than marriage is one of a changing business, rather than a changing relationship. Whatever the solid economic benefits of EU membership, the British people decided the social and democratic costs had become too great. So now we must adapt.

Brexit should be as much about innovating in what we make and create as it is about seeking to renew our trading deals with the world. New products must be sought alongside new markets. This doesn’t have to mean cutting corners or cutting jobs, but it does mean being prepared to learn new skills and invest in helping those in industries that are struggling to make this leap to move on. The UK has an incredible and varied set of services and products to offer the world, but will need to focus on what we do well and uniquely here to thrive. This is easier said than done, but can also offer hope. Specialising and skilling up also means we can resist those who want us to jettison hard-won environmental and social protections as an alternative. 

Most accept such a transition will take time. But what is contested is that it will require openness. However, handing the public a done deal - however well mediated - will do little to address the division within our country. Ensuring the best deal in a way that can garner the public support it needs to work requires strong feedback channels. That is why transparency about the government's plans for Brexit is so important. Of course, a balance needs to be struck with the need to protect negotiating positions, but scrutiny by parliament- and by extension the public- will be vital. With so many differing factors at stake and choices to be made, MPs have to be able and willing to bring their constituents into the discussion not just about what Brexit actually entails, but also what kind of country Britain will be during and after the result - and their role in making it happen. 

Those who want to claim the engagement of parliament and the public undermines the referendum result are still in stages one and two of this debate, looking for someone to blame for past injustices, not building a better future for all. Our Marmite may be safe for the moment, but Brexit can’t remain a love it or hate it phenomenon. It’s time for everyone to get practical.