Has there ever been a government scheme with fewer friends than the Treasury’s flagship ‘Help to Buy’?
Yesterday no less than three former Chancellors, two of them Conservatives, added their voice to those expressing concern. They are worried that the explosive house-price inflation unleashed by the scheme threatens economic stability and risks locking an entire generation out of home ownership. Here they join the OECD, the IMF, the Treasury Select Committee, the OBR, Mervyn King etc (I really could go on).
Despite this, the scheme persists. A clue to its survival is contained in a separate FT piece yesterday, which noted:
“Mr Osborne has no regrets. Indeed, the chancellor regards Help to Buy as one of his two most popular policies since entering the Treasury, the other being the £26,000 cap on annual welfare payments.”
This has long been a view expressed by political commentators: that despite being questionable economics, the scheme is somehow good politics. It’s a view best articulated by Janan Ganesh last year, who noted the schemes potential “symbolic appeal” for the Conservatives. “It is hard to exaggerate how much political potential they see in this scheme”, he wrote. “There is a glittering electoral prize beckoning whichever party can connect with the many young to middle-aged voters priced out of the housing market…”.
Unfortunately, emerging evidence suggests there is in fact no comfort to be had by Mr Osborne here either. The scheme seems to be having little impact with voters, who are instead worried about its potential effects for them and their families.
This was brought home emphatically last week by YouGov’s latest issues polling. Overall the numbers were positive for the Conservatives. The Tories have either gained ground on Labour, or extended their lead, on every major issue – wages, jobs, the deficit. That is, all issues except one. YouGov asked “Which government do you think would be better for helping people get on to the housing ladder?” On this, the Conservative lead over Labour has fallen from 11 points last October to just 2 today.
This is despite a considerable amount of resource spent advertising Help to Buy since October.
It’s no huge surprise. At Shelter, we’ve long queried the political wisdom of ‘Help to Buy’. It helps relatively few people, and risks over-burdening with debt those that it does. And polling from ComRes this week shows clearly that most (47% to 35%) voters think rising house prices are bad for their family, not good. It’s simply no longer true that runaway house prices are universally popular.
But more broadly, the YouGov polling tells us a couple of things.
One is that it looks increasingly like housing is going to be one of the most contested issues ahead of the next General Election – with little separating the two major parties at this stage in the polls.
Janan Ganesh was not wrong when he said that there is a huge electoral prize for the party that best speaks to the ‘priced out generation’ and (as importantly) their concerned parents. As rents and house prices increase, anxiety is rising, making housing a top 5 voter issue in the polls. Voters want answers on housing, and reassurance that their children will not still be living in their childhood bedrooms at the age of 35.
But Help to Buy was essentially a short-cut to that political win – a policy which spoke about the concerns that people have about the housing ladder slipping out of reach, but which didn’t address any of the underlying problems which have caused decades of under-supply and dramatically rising prices.
Most importantly, the fact that Help to Buy hasn’t delivered a poll boost for the Conservatives on housing tells us that there simply are no short-cuts when it comes to tackling the housing crisis – and the public know that. A big, bold and comprehensive vision to get more homes built is the only way to show leadership. Doing that isn’t easy. It will require genuine leadership, and a long-term programme of investment and reform. But it’s a pre-requisite to even begin to get a hearing from voters.
Encouragingly, it seems that politicians from all three major parties are beginning to get this. From the Chancellor’s unapologetic promise to “build for Britain” in his latest Budget, to Planning Minister Nick Boles’s commitment to get more home built, to the Deputy Prime Minister’s backing of garden cities, and Ed Miliband’s pledge to build 200,00 homes a year.
After decades of political neglect, and a woeful record on house building from all governments of the last 30 years, this is good news. Those same politicians now need to resist the urge to seek out more ‘short cut’ policies like Help to Buy, and commit to delivering a real step-change in building more homes. It’s the only thing that works in practice, and it’s the only route to credibility with voters.
Perhaps they could start by going here, where we’ve done the work for them: http://www.thehomesweneed.org.uk