George Osborne delivers a speech at the Point Hotel on February 13, 2014 in Edinburgh. Photograph: Getty Images.
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Westminster's pledge to deny Scotland the pound has been vindicated

The act was denounced as "bullying" at the time, but Salmond's struggles prove it was the right choice. 

When the triumvirate of George Osborne, Ed Balls and Danny Alexander pledged earlier this year to veto a currency union with an independent Scotland many questioned their judgement. Such "bullying" tactics, it was said, would backfire and only encourage the Scots to vote for separation. For a period, as the polls narrowed, it appeared the critics were right. 

But the events of the last few days have vindicated Westminster's stance. It was the currency question, more than any other, that had Alex Salmond on the ropes in his debate with Alistair Darling on Tuesday and he has not regained his poise since. With all three of the main parties adamant that there will be no currency union, Salmond is torn between insisting they are bluffing (they aren't) and declaring that Scotland would continue to use the pound regardless (just as Panama and Ecuador use the dollar). 

"It is Scotland's pound. It doesn't belong to George Osborne, it doesn't belong to Ed Balls. It's Scotland's pound and we are keeping it," he said at First Minister's questions yesterday. It is what this would entail that means voters are stubbornly refusing to change sides (the Yes campaign continues to trail by a double-digit margin). Scotland would be left with no central bank, no lender of last resort (the role currently filled by the Bank of England) and no control over its interest rates. 

As Ed Miliband said in Scotland today: "On Tuesday night Alex Salmond didn’t have an answer on the pound. The currency that Scotland uses is crucial for Scotland’s future. Nobody claiming to be a social democrat who cares about Scottish pensioners, Scottish families and Scottish businesses should dare take this risk without a currency plan. If you care about social justice in our country, you can't leave the economics to guesswork. 

"That’s why businesses and families are demanding answers on the currency. Those at the top can move their money across the border and keep the pound. We know that the people who would stand to lose most from making this decision, are those who have the least. It would be working people, small businesses across Scotland who would be left to deal with the consequences of no Plan B."

In desperation, Salmond continues to threaten to default on his country's share of the UK's national debt if the government vetoes a currency union. But any default would render Scotland an economic pariah, destroying its creditworthiness at a single stroke and preventing it from raising the funds it needs on the international money markets. 

For all this, it is hard to see how Salmond could have handled the issue better. The alternatives of a new currency and the euro are even less attractive to voters than his "crossed fingers" approach. But that is only further proof of why it's wrong to raise the question of independence in the first place. 

George Eaton is political editor of the New Statesman.

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.