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.

Getty
Show Hide image

Air pollution: 5 steps to vanquishing an invisible killer

A new report looks at the economics of air pollution. 

110, 150, 520... These chilling statistics are the number of deaths attributable to particulate air pollution for the cities of Southampton, Nottingham and Birmingham in 2010 respectively. Or how about 40,000 - that is the total number of UK deaths per year that are attributable the combined effects of particulate matter (PM2.5) and Nitrogen Oxides (NOx).

This situation sucks, to say the very least. But while there are no dramatic images to stir up action, these deaths are preventable and we know their cause. Road traffic is the worst culprit. Traffic is responsible for 80 per cent of NOx on high pollution roads, with diesel engines contributing the bulk of the problem.

Now a new report by ResPublica has compiled a list of ways that city councils around the UK can help. The report argues that: “The onus is on cities to create plans that can meet the health and economic challenge within a short time-frame, and identify what they need from national government to do so.”

This is a diplomatic way of saying that current government action on the subject does not go far enough – and that cities must help prod them into gear. That includes poking holes in the government’s proposed plans for new “Clean Air Zones”.

Here are just five of the ways the report suggests letting the light in and the pollution out:

1. Clean up the draft Clean Air Zones framework

Last October, the government set out its draft plans for new Clean Air Zones in the UK’s five most polluted cities, Birmingham, Derby, Leeds, Nottingham and Southampton (excluding London - where other plans are afoot). These zones will charge “polluting” vehicles to enter and can be implemented with varying levels of intensity, with three options that include cars and one that does not.

But the report argues that there is still too much potential for polluters to play dirty with the rules. Car-charging zones must be mandatory for all cities that breach the current EU standards, the report argues (not just the suggested five). Otherwise national operators who own fleets of vehicles could simply relocate outdated buses or taxis to places where they don’t have to pay.  

Different vehicles should fall under the same rules, the report added. Otherwise, taking your car rather than the bus could suddenly seem like the cost-saving option.

2. Vouchers to vouch-safe the project’s success

The government is exploring a scrappage scheme for diesel cars, to help get the worst and oldest polluting vehicles off the road. But as the report points out, blanket scrappage could simply put a whole load of new fossil-fuel cars on the road.

Instead, ResPublica suggests using the revenue from the Clean Air Zone charges, plus hiked vehicle registration fees, to create “Pollution Reduction Vouchers”.

Low-income households with older cars, that would be liable to charging, could then use the vouchers to help secure alternative transport, buy a new and compliant car, or retrofit their existing vehicle with new technology.

3. Extend Vehicle Excise Duty

Vehicle Excise Duty is currently only tiered by how much CO2 pollution a car creates for the first year. After that it becomes a flat rate for all cars under £40,000. The report suggests changing this so that the most polluting vehicles for CO2, NOx and PM2.5 continue to pay higher rates throughout their life span.

For ClientEarth CEO James Thornton, changes to vehicle excise duty are key to moving people onto cleaner modes of transport: “We need a network of clean air zones to keep the most polluting diesel vehicles from the most polluted parts of our towns and cities and incentives such as a targeted scrappage scheme and changes to vehicle excise duty to move people onto cleaner modes of transport.”

4. Repurposed car parks

You would think city bosses would want less cars in the centre of town. But while less cars is good news for oxygen-breathers, it is bad news for city budgets reliant on parking charges. But using car parks to tap into new revenue from property development and joint ventures could help cities reverse this thinking.

5. Prioritise public awareness

Charge zones can be understandably unpopular. In 2008, a referendum in Manchester defeated the idea of congestion charging. So a big effort is needed to raise public awareness of the health crisis our roads have caused. Metro mayors should outline pollution plans in their manifestos, the report suggests. And cities can take advantage of their existing assets. For example in London there are plans to use electronics in the Underground to update travellers on the air pollution levels.

***

Change is already in the air. Southampton has used money from the Local Sustainable Travel Fund to run a successful messaging campaign. And in 2011 Nottingham City Council became the first city to implement a Workplace Parking levy – a scheme which has raised £35.3m to help extend its tram system, upgrade the station and purchase electric buses.

But many more “air necessities” are needed before we can forget about pollution’s worry and its strife.  

 

India Bourke is an environment writer and editorial assistant at the New Statesman.