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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The SNP thinks it knows how to kill hard Brexit

The Supreme Court ruled MPs must have a say in triggering Article 50. But the opposition must unite to succeed. 

For a few minutes on Tuesday morning, the crowd in the Supreme Court listened as the verdict was read out. Parliament must have the right to authorise the triggering of Article 50. The devolved nations would not get a veto. 

There was a moment of silence. And then the opponents of hard Brexit hit the phones. 

For the Scottish government, the pro-Remain members of the Welsh Assembly and Sinn Féin in Northern Ireland, the victory was bittersweet. 

The ruling prompted Scotland’s First Minister, Nicola Sturgeon, to ask: “Is it better that we take our future into our own hands?”

Ever the pragmatist, though, Sturgeon has simultaneously released her Westminster attack dogs. 

Within minutes of the ruling, the SNP had vowed to put forward 50 amendments (see what they did there) to UK government legislation before Article 50 is enacted. 

This includes the demand for a Brexit white paper – shared by MPs from all parties – to a clause designed to prevent the UK reverting to World Trade Organisation rules if a deal is not agreed. 

But with Labour planning to approve the triggering of Article 50, can the SNP cause havoc with the government’s plans, or will it simply be a chorus of disapproval in the rest of Parliament’s ear?

The SNP can expect some support. Individual SNP MPs have already successfully worked with Labour MPs on issues such as benefit cuts. Pro-Remain Labour backbenchers opposed to Article 50 will not rule out “holding hands with the devil to cross the bridge”, as one insider put it. The sole Green MP, Caroline Lucas, will consider backing SNP amendments she agrees with as well as tabling her own. 

But meanwhile, other opposition parties are seeking their own amendments. Jeremy Corbyn said Labour will seek amendments to stop the Conservatives turning the UK “into a bargain basement tax haven” and is demanding tariff-free access to the EU. 

Separately, the Liberal Democrats are seeking three main amendments – single market membership, rights for EU nationals and a referendum on the deal, which is a “red line”.

Meanwhile, pro-Remain Tory backbenchers are watching their leadership closely to decide how far to stray from the party line. 

But if the Article 50 ruling has woken Parliament up, the initial reaction has been chaotic rather than collaborative. Despite the Lib Dems’ position as the most UK-wide anti-Brexit voice, neither the SNP nor Labour managed to co-ordinate with them. 

Indeed, the Lib Dems look set to vote against Labour’s tariff-free amendment on the grounds it is not good enough, while expecting Labour to vote against their demand of membership of the single market. 

The question for all opposition parties is whether they can find enough amendments to agree on to force the government onto the defensive. Otherwise, this defeat for the government is hardly a defeat at all. 

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.