Why the Lib Dems will struggle to win any credit for the recovery

This recovery runs to a traditional Conservative narrative - harsh medicine applied by a single-minded Chancellor.

" 'Without the Liberal Democrats, there wouldn't be a recovery.' That's Clegg's election line there", tweeted the very astute editor of this blog during Nick’s stint at Prime Minister's Questions this week and there’s every indication that he’s right to say that’s what we’ll be hanging our hat on in 2015. The same line was tweeted moments later by the Lib Dem Press Office and Danny Alexander has written to members with a similar message after the Autumn Statement

“This recovery would not have been possible without us, and neither would the vast majority of the positive measures in today’s Autumn Statement. In fact, setting the Tory Marriage Tax break to one side, the Autumn Statement is packed full of Liberal Democrat ideas.”

And of course, it also happens to be true (though I don’t suppose that fact will feature much in the comments section of The Staggers), not least because by going into coalition in the first place we provided a more stable government than any other option allowed at a time of great economic uncertainty.

And yet it’s hard to escape the notion that this will be painted as anything other than a Tory victory. This recovery runs to a traditional Conservative narrative -  harsh medicine applied to a patient suffering from a potentially fatal illness, ignoring the cries and the pleas for mercy, because they know what’s good for you. Of course, it’s not precisely true – as Stephen Tall has pointed out, Plan A got abandoned (or at least diluted) some time ago. But that’s how the story is playing out.  And it suits the Tories that it does so, because it means they can own it.

Hence the willingness to dump the "green crap", the huskies, and any notions of hugging a hoodie. Because it’s the nasty party that owns the economic narrative. And let’s not forget, after three years of austerity, recession and economic malaise, that nasty party is only 3 or 4% worse off in the polls than when it was running against the most unpopular Labour government for a generation or more (this morning’s YouGov poll notwithstanding).

I fear the Tories think the nasty party narrative suddenly has traction and electoral credibility. And it’s that single-mindedness that will make it so hard for the Lib Dems to claim any credit for the economic recovery. Not helped by the fact that the 'differentiation strategy' dictates that, for the second half of the parliament, we are meant to distance ourselves from the Tories at every turn.

Sure, Lib Dems will be awarded the odd battle in the court of public opinion – raising the tax threshold, free school meals, pension reform. But the narrative of the Autumn Statement is triumph for Osborne, disaster for Balls. The battle for the Lib Dems will be to get nary a mention at all.

Nick Clegg speaks at the Liberal Democrat conference in Glasgow earlier this year. Photograph: Getty Images.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.