Labour challenges Cameron's Help to Buy boasts with call for more housebuilding

While the PM hails figures showing 750 homes have already been bought under the scheme, Labour remains focused on increasing building from its post-war low.

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. Three months after the launch of the mortgage guarantee scheme, David Cameron is hailing new figures showing that 750 homes have been bought with state assistance (so much for not 'intervening' in markets) and that 6,000 people, or 100 a day, have made offers on properties. 

The Tories are particularly keen to draw attention to figures showing that, contrary to what some predicted, more than 80% of applicants are first-time buyers and three-quarters live outside London and the south east. On average, households are seeking to buy homes worth £160,000, below the average UK house price of £247,000. Cameron says: "The New Year is often a time when people look to make those big life-changing decisions like moving home or taking that first step on the housing ladder. But too many people have found themselves frozen out of the market in recent years as a result of the size of the deposit required.

"That is why as part of our long-term economic plan we introduced the Help to Buy scheme, so hardworking people with sufficient earnings can get on, fulfil their aspirations and enjoy the security of owning their own home. In less than three months, the scheme has already helped thousands of people. I want to see that continue in 2014 and for Help to Buy to help thousands more realise their dream of home ownership."

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 (he will be in Southampton today). 

For Labour, Help to Buy represents a political challenge. Those who benefit from the scheme will naturally be grateful to the government, while others who do not, or who lose out through price inflation (one of the ill-disguised aims of the policy), may not necessarily blame the coalition. But by warning that only more housebuilding will bring prices under control, and that the government is failing to build enough, Labour can offer a distinctive message. Shadow housing minister Emma Reynolds said in response to Cameron: "Any help for first time buyers struggling to get on the property ladder is to be welcomed. But rising demand for housing must be matched with rising supply if this scheme is to bring the cost of housing within the reach of low and middle income earners.

"Instead under this government housebuilding is at its lowest level since the 1920s. You can't deal with the cost-of-living crisis without building more homes. That's why Labour has committed to building 200,000 homes a year by 2020."

On this point, Labour is at one with economists, who argue in the FT's annual survey that more building is the best way to restrain an incipient housing bubble. Charles Davis of the Centre for Economics and Business Research says: "The simple, crucial fact is that there remains a massive, basic discrepancy between the demand and new supply of homes in the UK. Until that is solved there is likely to be a real appreciation of bricks and mortar, especially while monetary policy is still as loose as it is."

John Llewellyn of Llewellyn Consulting says: "The best way to restrain the housing market is to allow more houses to be built. That implies releasing land; and building better transport infrastructure so that people can commute within their one to one-and-a-half hour travel-time budgets." And Andrew Simms of the New Economics Foundation says: "Increasing the supply of housing will go some way to reducing price inflation and that can be done in a number of ways: properly promote new, low-cost, energy-efficient house building, renovate unfit housing stock and compel many of the estimated 900,000 plus empty homes in the UK to be brought back into the market."

Ministers' response is to point to figures suggesting that greater demand is stimulating greater supply. In the 12 months to September 2013, annual housing starts totalled 117,110, up by 16% compared to the year before (although annual housing completions fell by 8% to just 107,950). But this remains progress from a very low base. Unless the rate of building increases dramatically, Labour will still be able to warn that Help to Buy is not addressing the greatest problems in housing and continue to flesh out its plan to do so. 

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.

Photo: Getty
Show Hide image

Seven things we learnt from the Battle for Number 10

Jeremy Corbyn emerged the better as he and Theresa May faced a live studio audience and Jeremy Paxman. 

1. Jeremy Corbyn is a natural performer

The Labour leader put in a bravura performance in both the audience Q&A and in his tussle with Jeremy Paxman. He is often uncomfortable at Prime Minister’s Questions but outside of the Commons chamber he has the confidence of a veteran of countless panels, televised discussions and hustings.

If, like me, you watched him at more hustings in the Labour leadership contests of 2015 and 2016 than you care to count, this performance wasn’t a surprise. Corbyn has been doing this for a long time and it showed.

2. And he’s improving all the time

Jeremy Corbyn isn’t quite perfect in this format, however. He has a temper and is prone to the odd flash of irritation that looks bad on television in particular. None of the four candidates he has faced for the Labour leadership – not Yvette Cooper, not Andy Burnham, not Liz Kendall and not Owen Smith – have managed to get under his skin, but when an interviewer has done so, the results have never been pretty for the Labour leader.

The big fear going into tonight for Corbyn was that his temper would get the better of him. But he remained serene in the fact of Paxman’s attempts to rile him until quite close to the end. By that point, Paxman’s frequent interruptions meant that the studio audience, at least, was firmly on Corbyn’s side.

3. Theresa May was wise to swerve the debates

On Jeremy Corbyn’s performance, this validated Theresa May’s decision not to face him directly. He was fluent and assured, she was nervous and warbly.  It was a misstep even to agree to this event. Anyone who decides their vote as far as TV performances tonight will opt for Jeremy Corbyn, there’s no doubt of that.

But if she does make it back to Downing Street it will, in part, be because in one of the few good moves of her campaign she chose to avoid debating Corbyn directly.

4.…but she found a way to survive

Theresa May’s social care U-Turn and her misfiring campaign mean that the voters don’t love her as they once did. But she found an alternate route through the audience Q&A, smothering the audience with grimly dull answers that mostly bored the dissent out of listeners.

5. Theresa May’s manifesto has damaged her. The only question is how badly

It’s undeniable now that Theresa May’s election campaign has been a failure, but we still don’t know the extent of the failure. It may be that she manages to win a big majority by running against Jeremy Corbyn. She will be powerful as far as votes in the House of Commons but she will never again be seen as the electoral asset she once was at Westminster.

It could be that she ends up with a small majority in which case she may not last very much longer at Downing Street. And it could be that Jeremy Corbyn ends up defeating her on 8 June.

That the audience openly laughed when she talked of costings in her manifesto felt like the creaking of a rope bridge over a perilous ravine. Her path may well hold until 8 June, but you wouldn’t want to be in her shoes yourself and no-one would bet on the Conservative Party risking a repeat of the trip in 2022, no matter what happens in two weeks’ time.

6. Jeremy Paxman had a patchy night but can still pack a punch

If Jeremy Paxman ever does produce a collected Greatest Hits, this performance is unlikely to make the boxset. He tried and failed to rouse Jeremy Corbyn into anger and succeeded only in making the audience side with the Labour leader. So committed was he to cutting across Theresa May that he interrupted her while making a mistake.

He did, however, do a better job of damaging Theresa May than he did Jeremy Corbyn.  But not much better.

7. Theresa May may have opposed Brexit, but now she needs it to save her

It’s not a good sign for the sitting Prime Minister that the audience laughed at many of her statements. She had only one reliable set of applause lines: her commitment to getting the best Brexit deal.

In a supreme irony, the woman who opposed a Leave vote now needs the election to be a referendum re-run if she is to secure the big majority she dreams of. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

0800 7318496