The question the Tories still won't answer about Help to Buy

Why does a scheme supposedly designed to help first-time buyers offer taxpayer-backed mortgages for properties worth up to £600,000?

While it's hard to find an economist with a good word to say about Help to Buy, the Tories are convinced that the policy is political gold. A month after the full launch of the scheme, David Cameron boasts in today's Sun that more than 2,000 people, or 75 families a day, have already been accepted in principle for a mortgage. In an attempt to emulate Margaret Thatcher, who was memorably photographed handing over the keys to those who bought their council homes under Right to Buy, Cameron has asked staff to ensure that he meet couples benefiting from the policy whenever he makes a regional visit.

The Tories are particularly keen to draw attention to figures showing that three-quarters of applicants are first-time buyers and that the average price of a house bought under the scheme is £163,000, with most located outside of London and the south east. Cameron writes: "When we launched Help to Buy we heard a lot of scare stories about how this would be a policy for the rich, the South East, the elderly and those who already had homes. One month in and the figures show this is nonsense. The typical house bought with Help to Buy is just over £160,000 — well below the national average. It’s proving hugely popular across the country, with three quarters of applications outside London and the South East. And what’s more, most applicants are first-time buyers, young and have an average household income."

But one question the Conservatives are still unwilling to answer is why a scheme ostensibly designed to help first-time-buyers offers taxpayer-backed mortgages for properties worth up to £600,000. Even if only a minority of applicants purchase homes worth more than the national average, this remains a dubious use of public money. The suspicion is that the Tories are seeking to create what George Osborne reportedly described as a "little housing boom", something that would put houses even further out of reach for most would-be buyers. If the impression develops that the government is focused on stimulating demand rather than expanding supply, Help to Buy may not prove to be the political elixir that Cameron hopes.

A recent poll by Ipsos MORI for Inside Housing showed that 57% disagree that "rising house prices are a good thing for Britain" (23% of whom strongly disagree), while just 20% agree. In addition, by 41% to 29%, they disagree that "rising house prices are a good thing for me personally". The recent experience of the crash and concern at the lack of affordable housing for young people has, perhaps unsurprisingly, persuaded the public that inflating another housing bubble isn't a great idea. With its call for the Help to Buy cap to be lowered from £600,000 and its pledge to build 200,000 homes a year by 2020, Labour may ultimately be the victor in the housing wars.

David Cameron meets first time buyers Kayleigh Groom and Chris Day, as he visits a housing estate in Weston Favell. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Everyone's forgotten the one issue that united the Labour party

There was a time when Ed Miliband spoke at Momentum rallies.

To label the row over the EU at Thursday’s Labour leadership hustings "fireworks" would be to endow it with more beauty than it deserves. Owen Smith’s dogged condemnation of John McDonnell’s absence from a Remain rally – only for Corbyn to point out that his absence was for medical reasons – ought to go down as a cringing new low point in the campaign. 

Not so long ago, we were all friends. In the course of the EU referendum, almost all of the protagonists in the current debacle spoke alongside each other and praised one another’s efforts. At a local level, party activists of all stripes joined forces. Two days before polling day, Momentum activists helped organise an impromptu rally. Ed Miliband was the headline speaker, and was cheered on. 

If you take the simple version of the debate, Labour’s schism on the EU appears as an aberration of the usual dynamics of left and right in the party. Labour's left is supposedly cheering a position which avoids advocating what it believes in (Remain), because it would lose votes. Meanwhile, the right claims to be dying in a ditch for its principles - no matter what the consequences for Labour’s support in Leave-voting heartlands.

Smith wants to oppose Brexit, even after the vote, on the basis of using every available procedural mechanism. He would whip MPs against the invocation of Article 50, refuse to implement it in government, and run on a manifesto of staying in the EU. For the die-hard Europhiles on the left – and I count myself among these, having run the Another Europe is Possible campaign during the referendum – there ought to be no contest as to who to support. On a result that is so damaging to people’s lives and so rooted in prejudice, how could we ever accept that there is such a thing as a "final word"? 

And yet, on the basic principles that lie behind a progressive version of EU membership, such as freedom of movement, Smith seems to contradict himself. Right at the outset of the Labour leadership, Smith took to Newsnight to express his view – typical of many politicians moulded in the era of New Labour – that Labour needed to “listen” to the views Leave voters by simply adopting them, regardless of whether or not they were right. There were, he said, “too many” immigrants in some parts of the country. 

Unlike Smith, Corbyn has not made his post-Brexit policy a headline feature of the campaign, and it is less widely understood. But it is clear, via the five "red lines" outlined by John McDonnell at the end of June:

  1. full access to the single market
  2. membership of the European investment bank
  3. access to trading rights for financial services sector
  4. full residency rights for all EU nationals in the UK and all UK nationals in the EU, and
  5. the enshrinement of EU protections for workers. 

Without these five conditions being met, Labour would presumably not support the invocation of Article 50. So if, as seems likely, a Conservative government would never meet these five conditions, would there be any real difference in how a Corbyn leadership would handle the situation? 

The fight over the legacy of the referendum is theatrical at times. The mutual mistrust last week played out on the stage in front of a mass televised audience. Some Corbyn supporters jeered Smith as he made the case for another referendum. Smith accused Corbyn of not even voting for Remain, and wouldn’t let it go. But, deep down, the division is really about a difference of emphasis. 

It speaks to a deeper truth about the future of Britain in Europe. During the referendum, the establishment case for Remain floundered because it refused to make the case that unemployment and declining public services were the result of austerity, not immigrants. Being spearheaded by Conservatives, it couldn’t. It fell to the left to offer the ideological counter attack that was needed – and we failed to reach enough people. 

As a result, what we got was a popular mandate for petty racism and a potentially long-term shift to the right in British politics, endangering a whole raft of workplace and legal protections along the way. Now that it has happened, anyone who really hopes to overcome either Brexit, or the meaning of Brexit, has to address the core attitudes and debates at their root. Then as now, it is only clear left-wing ideas – free from any attempt to triangulate towards anti-migrant sentiment– that can have any hope of success. 

The real dividing lines in Labour are not about the EU. If they were, the Eurosceptic Frank Field would not be backing Smith. For all that it may be convenient to deny it, Europe was once, briefly, the issue that united the Labour Party. One day, the issues at stake in the referendum may do so again – but only if Labour consolidates itself around a strategy for convincing people of ideas, rather than simply reaching for procedural levers.