It may buy votes, but it won't get many houses. (Image: Getty)
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Help to Buy ISAs are a great election gimmick. That's a relief, because they're no good for first-time buyers

Help to Buy ISAs are eye-catching - but useless.

Let’s start by giving George Osborne some credit: seven weeks out from a general election this is no time for sensible, long-term policymaking. He knows what he’s doing with his Help to Buy Isa, which is trying to win an election, not address the country’s long-term housing challenge. Which is just as well, because it will not help with that at all.

The UK has a housing shortage, or at least parts of it do, notably the South-East where many (too many) of the jobs are. Demand has been growing faster than supply for many years, and so prices have been increasing rapidly with the average home now costing many multiples of the average salary. It is quite plain that the scales need rebalancing away from demand and towards supply.

And yet. The Chancellor, in one of the major announcements of his pre-election Budget, has decided to go instead for boosting demand. A new Help to Buy Isa will be available from this autumn for first-time buyers, who will effectively have their savings topped up by 25%, up to a maximum of £3,000 (although this seems to be per person so could amount to £6,000 for a couple purchasing their first home together). This is an extension of earlier Help to Buy initiatives but it marks quite a fundamental shift in that previous measures have amounted to loans and guarantees: now, the state will be directly topping up buyers’ savings at the point of purchase. It will be giving people money to buy homes with. There is no direct precedent for this that I can think of.

On the face of it, this is a great idea. Owner-occupation has been declining since the early 2000s. The latest English Housing Survey puts it at 63%, its lowest level since the mid-1980s. In London it is only 48% - a minority, which owner-occupiers in the rest of the country are expected to be in by the 2030s. And a major obstacle for those being shut out of the market is indeed the difficulty of saving up a big enough deposit, especially since mortgage lending tightened after the 2008 crash. These people certainly need greater government support, but not via a subsidy like this which will simply increase aggregate purchasing power in the housing market and so hold up house prices for everybody, including first-time buyers and future generations who will have even less chance of purchasing their own home. The Treasury’s spending forecast for this scheme is something like £1 billion a year by the end of the next parliament, depending on take-up.

If the Chancellor really wanted to help first-time buyers – and not just those that might be voting in  May, but the young people of the next couple of decades – then he would be doing something to bring prices down rather than helping to keep them up. There are two principal ways in which he could be doing this.

Firstly, he could build more homes. Not just encouraging the private sector to build enough (which it never has and never will) but actually committing significant public investment to building the homes we need. This was how the post-war governments managed to build the homes the country needed until such spending was wound down from the 1970s. The period since has amounted to a prolonged experiment in getting the market to pick up the slack – and failing. He could start by diverting this Help to Buy cash into housebuilding. Those sceptical about the cost should remember that we already spend £25 billion a year in housing benefit (which goes to landlords in rent subsidies), largely as a result of our failure to build enough homes.

Secondly, he could severely restrict further house purchases by private landlords. Young people are being priced out of the market not by each other, in the main, but by a private rented sector which has been booming since the 1990s. The decline in owner-occupation has been in inverse proportion to the growth in the landlord class, which has more than doubled the number of homes it owns in just over a decade and now accounts for 19% of the housing stock in England. It is continuing to grow, fuelled by a housing benefit system which effectively under-writes the demands of landlords already charging more than a quarter of their tenants can afford/

Of course if this government had intended anything meaningful on housing it would have initiated it five years ago, not at the tail end of its time in office. There are too many vested interests standing in the way of what is really needed, which is real action to tackle the causes of house price growth. But these interests are not confined to developers, housebuilders, estate agents or private landlords – it also includes the millions of people who already own their homes, who enjoy seeing their assets rise in value. This amounts to a formidable lobby, and one that Osborne has not taken on. But this close to an election, who would?

Jeremy Corbyn. Photo: Getty
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Jeremy Corbyn: “wholesale” EU immigration has destroyed conditions for British workers

The Labour leader has told Andrew Marr that his party wants to leave the single market.

Mass immigration from the European Union has been used to "destroy" the conditions of British workers, Jeremy Corbyn said today. 

The Labour leader was pressed on his party's attitude to immigration on the Andrew Marr programme. He reiterated his belief that Britain should leave the Single Market, claiming that "the single market is dependent on membership of the EU . . . the two things are inextricably linked."

Corbyn said that Labour would argue for "tarriff-free trade access" instead. However, other countries which enjoy this kind of deal, such as Norway, do so by accepting the "four freedoms" of the single market, which include freedom of movement for people. Labour MP Chuka Umunna has led a parliamentary attempt to keep Britain in the single market, arguing that 66 per cent of Labour members want to stay. The SNP's Nicola Sturgeon said that "Labour's failure to stand up for common sense on single market will make them as culpable as Tories for Brexit disaster".

Laying out the case for leaving the single market, Corbyn used language we have rarely heard from him - blaming immigration for harming the lives of British workers.

The Labour leader said that after leaving the EU, there would still be European workers in Britain and vice versa. He added: "What there wouldn't be is the wholesale importation of underpaid workers from central Europe in order to destroy conditions, particularly in the construction industry." 

Corbyn said he would prevent agencies from advertising jobs in central Europe - asking them to "advertise in the locality first". This idea draws on the "Preston model" adopted by that local authority, of trying to prioritise local suppliers for public sector contracts. The rules of the EU prevent this approach, seeing it as discrimination. 

In the future, foreign workers would "come here on the basis of the jobs available and their skill sets to go with it. What we wouldn't allow is this practice by agencies, who are quite disgraceful they way they do it - recruit a workforce, low paid - and bring them here in order to dismiss an existing workforce in the construction industry, then pay them low wages. It's appalling. And the only people who benefit are the companies."

Corbyn also said that a government led by him "would guarantee the right of EU nationals to remain here, including a right of family reunion" and would hope for a reciprocal arrangement from the EU for British citizens abroad. 

Matt Holehouse, the UK/EU correspondent for MLex, said Corbyn's phrasing was "Ukippy". 

Asked by Andrew Marr if he had sympathy with Eurosceptics - having voted against previous EU treaties such as Maastricht - Corbyn clarified his stance on the EU. He was against a "deregulated free market across Europe", he said, but supported the "social" aspects of the EU, such as workers' rights. However, he did not like its opposition to state subsidy of industry.

On student fees, Corbyn was asked "What did you mean by 'I will deal with it'?". He said "recognised" that graduates faced a huge burden from paying off their fees but did not make a manifesto commitment to forgive the debt from previous years. However, Labour would abolish student debt from the time it was elected. Had it won the 2017 election, students in the 2017/18 intake would not pay fees (or these would be refunded). 

The interview also covered the BBC gender pay gap. Corbyn said that Labour would look at a gender pay audit in every company, and a pay ratio - no one could receive more than 20 times the salary of the lowest paid employee. "The BBC needs to look at itself . . . the pay gap is astronomical," he added. 

He added that he did not think it was "sustainable" for the government to give the DUP £1.5bn and was looking forward to another election.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.