Why the Tories are wrong to assume that Help to Buy is political gold

While Osborne believes that "everyone will be happy as property values go up", new polling shows most of the public don't believe rising house prices are good for them or good for Britain.

There is rarely a day when the government's Help to Buy scheme isn't criticised by some major organisation or political figure, and today's rebuke was provided by Ed Balls. In his speech to the CBI, he warned that inflating demand without significantly increasing supply would deliver "an unbalanced recovery" and "make home ownership even further out of reach for the aspiring first time buyers his scheme should be helping."

But unperturbed by such criticisms, the Tories are convinced that the policy is "retail gold". George Pascoe Watson recently reported that David Cameron had "ordered staff to ensure he meets couples taking advantage of the £10,000 assistance on offer whenever he goes on a regional visit". But while those who benefit directly from Help to Buy will obviously be grateful, what of those who don't? George 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 he would be wrong to assume that the public regard higher house prices as an unqualified good. A new poll by Ipsos MORI for Inside Housing shows 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.

If the impression develops that the government is focused on stimulating demand rather than expanding supply, Help to Buy could well prove a vote loser. By pledging to build 200,000 homes a year by 2017 and to limit the inflationary effect of Help to Buy (most obviously by reducing the current £600,000 cap for support), Labour is positioning itself to take advantage of this new sceptical mood.

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

George Eaton is political editor of the New Statesman.

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Brexit is teaching the UK that it needs immigrants

Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past.

Why did the UK vote to leave the EU? For conservatives, Brexit was about regaining parliamentary sovereignty. For socialists it was about escaping the single market. For still more it was a chance to punish David Cameron and George Osborne. But supreme among the causes was the desire to reduce immigration.

For years, as the government repeatedly missed its target to limit net migration to "tens of thousands", the EU provided a convenient scapegoat. The free movement of people allegedly made this ambition unachievable (even as non-European migration oustripped that from the continent). When Cameron, the author of the target, was later forced to argue that the price of leaving the EU was nevertheless too great, voters were unsurprisingly unconvinced.

But though the Leave campaign vowed to gain "control" of immigration, it was careful never to set a formal target. As many of its senior figures knew, reducing net migration to "tens of thousands" a year would come at an economic price (immigrants make a net fiscal contribution of £7bn a year). An OBR study found that with zero net migration, public sector debt would rise to 145 per cent of GDP by 2062-63, while with high net migration it would fall to 73 per cent. For the UK, with its poor productivity and sub-par infrastructure, immigration has long been an economic boon. 

When Theresa May became Prime Minister, some cabinet members hoped that she would abolish the net migration target in a "Nixon goes to China" moment. But rather than retreating, the former Home Secretary doubled down. She regards the target as essential on both political and policy grounds (and has rejected pleas to exempt foreign students). But though the same goal endures, Brexit is forcing ministers to reveal a rarely spoken truth: Britain needs immigrants.

Those who boasted during the referendum of their desire to reduce the number of newcomers have been forced to qualify their remarks. On last night's Question Time, Brexit secretary David Davis conceded that immigration woud not invariably fall following Brexit. "I cannot imagine that the policy will be anything other than that which is in the national interest, which means that from time to time we’ll need more, from time to time we’ll need less migrants."

Though Davis insisted that the government would eventually meet its "tens of thousands" target (while sounding rather unconvinced), he added: "The simple truth is that we have to manage this problem. You’ve got industry dependent on migrants. You’ve got social welfare, the national health service. You have to make sure they continue to work."

As my colleague Julia Rampen has charted, Davis's colleagues have inserted similar caveats. Andrea Leadsom, the Environment Secretary, who warned during the referendum that EU immigration could “overwhelm” Britain, has told farmers that she recognises “how important seasonal labour from the EU is to the everyday running of your businesses”. Others, such as the Health Secretary, Jeremy Hunt, the Business Secretary, Greg Clark, and the Communities Secretary, Sajid Javid, have issued similar guarantees to employers. Brexit is fuelling immigration nimbyism: “Fewer migrants, please, but not in my sector.”

The UK’s vote to leave the EU – and May’s decision to pursue a "hard Brexit" – has deprived the government of a convenient alibi for high immigration. Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past. Brexit may have been caused by the supposed costs of immigration but it is becoming an education in its benefits.

George Eaton is political editor of the New Statesman.