Labour's referendum u-turn is looking ever more likely

Many opposition MPs are persuaded by the case for making a virtue of necessity: resolve the issue and expose Tory divisions.

One consequence of Labour’s great frothy row over trade union influence is that yesterday’s parliamentary parade of Europhobia was bumped down the news agenda.

The vote on the first reading of a private member’s bill calling for an in/out referendum on EU membership was numerically if not politically rather dramatic. It was carried by 304 votes to nil. That means there will be another reading. So the charade gets to be played through another round. These bills become law extremely rarely and this one in particular proposes legislating for something that would happen after the next election, thereby binding a future parliament, which is constitutionally impossible.

The real point of the exercise is to give Conservative MPs the chance to boast to their constituents that they voted for a referendum in parliament and that Labour didn’t. This, it is hoped, will reinforce the message that the only way to get a say in whether Britain stays in the EU or not is to vote Tory. A vote for Ukip, say anxious Conservatives, is a de facto vote for Ed Miliband. Tory MPs report that this line is proving effective in their local associations. The threat of letting in Labour is the standard way to put a stop to harangues about Europe, gay marriage and all the other things that local Tory members harangue their MPs about.

So some Tories might be disappointed that their legislative stunt was poorly reported yesterday. (Although they won’t be sorry it was bumped in order to make way for lavish reporting of Labour disarray.) Besides, the spectacle of hundreds of Tories packing one side of the Commons chamber while the other one was entirely empty did reinforce the impression that this is a peculiar Tory obsession rather than a moment of great national significance. The mood around parliament in the run-up to the vote felt, in Tory quarters, like the anticipation of a stag party – lots of very hearty, cheery men all feeling immensely bullish and chummy in shared anti-Brussels spirit. If the Conservatives bottled that scent and released it to a wider audience I suspect it would not act as an electoral aphrodisiac.

Meanwhile, many Tories are wondering why Labour has not matched their referendum pledge. Just as many presume they will, and wonder when. (I’ve dealt with the question of whether they should and why they don’t want to here and here.) My sense of the mood in the opposition ranks is that the referendum u-turn has become inevitable. It is still possible to find Labour MPs who vigorously hate the idea, but fewer and fewer think it can be avoided. For that reason, the balance of power is shifting towards those who say the best thing to do is try to divide the Tories by calling for an in/out vote this side of a general election. Then, if it happens, Cameron – who ultimately wants to preserve EU membership – will campaign on the opposite side to many of his members, which could be problematic for party unity.

If Labour did go for that gambit they would certainly have support among hard core eurosceptic Tories. I spoke to one fairly moderate (but sometimes rebellious) Conservative recently who said quite casually that the Eurosceptics would “bank” yesterday’s vote and come back for more. Their plan too is to try to bring the referendum date forward.

Meanwhile, one idea floating around the Labour side is to aim for a referendum on the same day as the 2015 general election. The appeal here is that you get a higher turnout of what one advocate of the plan calls “normal, sensible people” which raises the chances of an “in” vote. And, of course, the Tories have to fight a general election campaign while splitting down the middle on a referendum campaign. Not that the decision is Labour’s to make, but as a plan it has the double virtues of clarity and strategic guile – commodities that have seemed in short supply on the opposition front benches of late. Ed Miliband might be tempted to go for it just because it would get people talking about divisions on the Tory side again instead of his own fracturing party.

Waiting for the leader to make the call. Source: Getty

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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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.