Activists have defied the ban on women driving in Saudi Arabia by getting behind the wheel. Photo: Getty
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Is Saudi Arabia seeking friends?

Saudi Arabia’s poor record on human rights and its treatment of women make it easy to demonise the kingdom.

Saudi Arabia’s foreign policy has always been concerned with one aim – political survival. Since the kingdom’s creation in 1932 with the aid of the British Colonial Office in the Arabian Peninsula, political analysts have frequently predicted its imminent collapse. All of them have been proved wrong. In large part, the key to Saudi’s survival has been its special relationship with the United States. This is enshrined in the 1928 Red Line Agreement, which the US exploited to gain exclusive rights to Saudi oil exploration after the First World War.

And yet, in the 1980s and at the turn of the 2oth century, Saudi Arabia unwittingly limited its political options. First, as Peter Schweizer revealed in his cold war history Victory, during the Reagan administration the Saudis worked with the CIA on a plan to bring down the Soviet Union by increasing Saudi crude oil production, thereby triggering a collapse in global oil prices.

This wasn’t entirely in the Saudis’ interest: the Soviet Union’s collapse deprived them of an alternative superpower with which they could work, in certain circumstances, to safeguard their own interests.

A decade later, the Saudis supported the US invasion and occupation of Iraq. Iraq was destroyed, depriving them of a powerful ally and a counterbalance to Iran’s regional ambitions. Today, Saudi Arabia stands alone in the Middle East as Iran’s influence grows, bolstered by the pro-Iranian regimes of Nouri al-Maliki in Iraq and Bashar al-Assad in Syria, as well as Hezbollah and the Houthi Shia tribe found in Iraq, Syria, Lebanon and Yemen.

Saudi Arabia’s poor record on human rights and its treatment of women make it easy to demonise the kingdom. This, coupled with its oil resources and vast international cash reserves, encourages friends and foes alike to support local opposition groups that destabilise the country.

At the same time, its historic support of religious extremists is no longer a viable way for it to gain regional influence, and is counterproductive if it wants to maintain a close relationship with Washington.

There is, however, one option open to Saudi Arabia if it wants to maintain the stability of the kingdom and challenge Iran: it should convince the US to stop arming the Iraqi government and persuade it to put pressure on al-Maliki to end his violent sectarian policies. US weapons are being used by the Iranian al-Quds Force to crush the Iraqi opposition and kill innocent civilians. The Saudis should also offer active support to those Iraqis resisting al-Maliki’s rule, such as by providing training camps to members of the former Iraqi national army, disbanded by Viceroy Paul Bremer in 2003.

In the face of potentially existential threats, a politically, economically and militarily powerful Iraq would no doubt enhance Saudi Arabia’s chances of political survival, against all the odds.

Burhan Al-Chalabi is the publisher of the London Magazine

This article first appeared in the 14 May 2014 issue of the New Statesman, Why empires fall

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.