Coffee House

Would George Osborne really be brazen enough to expand ‘Help to Buy?’

16 March 2014

7:41 AM

16 March 2014

7:41 AM

Today’s Sunday Times has news which would be laughable, if it were not to plausible. That George Osborne intends to pour some more petrol on the property market fire next week by extending his discredited Help To Buy equity loan scheme – in effect, a flagrant example of politicians using taxpayers’ money in an attempt to buy votes. It’s a sign that Osborne intends to use help-to-buy as an election weapon, and as loaned money doesn’t show up on the deficit figures he’s quite relaxed. Here’s the start of the Sunday Times story:-

The Help to Buy scheme, designed to help people get on to the housing ladder, is likely to be extended in this week’s budget. George Osborne is expected to frame his budget around improving the lives of working-class voters in marginal Conservative seats by helping them to buy their own homes and pay less tax. The chancellor is tipped to increase the personal tax allowance to £10,500 and also to extend the Help To Buy scheme beyond 2016. Under this equity-loan programme, the government offers buyers of newly built homes that are worth up to £600,000 a loan of up to 20% of the value of the property. The loan is interest free for five years.

Help to Buy was brought in so Osborne could lend taxpayers’ money to people to whom the banks would not lend (usually because they were deemed too large a credit risk – that’s why help-to-buy is dubbed right-to-default). That was when 95 per cent mortgages were a rarity. Now they’re everywhere, the housing market is booming, and from Cumbria to Chelsea you’re seeing valuations as heady as they were at the peak of the last bubble.

Britain’s property market – new-build or not  –  does not need help from the taxpayer. Rather, Osborne should be worrying about it overheating and thinking of ways to cool it down. Government should not be in the business of lending money to consumers, no matter how tempting it may be. This distorts markets, and almost always means greater pain further down the line.

The last conservative leader who tried to manipulate the property market for political purposes (to claim to voters he was on the side of hard-working people etc) was George W Bush – and we all know how subprime lending worked out for America. But before its damage, it did create a property boom, which itself begat a consumer spending boom. Brown did the same. And Osborne seems intent on replicating this now.


To extend Help to Buy after 2016 makes no sense: it should have been ended when the banks brought back 95 per cent mortgages.  It has so far been used by 14,823 house buyers, with another 5,000 on the way. A well-paid friend of mine is using it to buy a one-bedroom pad in Soho, arguing that if the government is daft enough to give him an interest-free loan, it’d be rude not to take it.

Economists are astounded at all this. Bloomberg surveyed 33 analysts recently and almost three-quarters said UK property at risk of overheating. Its report, published on Friday, went on to quote Nomura’s Philip Rush saying that…

Help to Buy “is encouraging a worsening of fragilities, creating the illusion of wealth by subsidizing house prices and encouraging a further leveraging up.”. Introduced by Osborne a year ago, the incentive program has helped boost mortgage lending. This stimulus, combined with a strengthening recovery and record-low interest rates, has bolstered demand for property and fuelled concern that a bubble may be forming.

If a Labour Chancellor were doing this craven attempt a bribing voters with their own money, he would be lambasted by the Tories – for precisely the same reasons as Ed Miliband is lambasted for his plan for  state intervention in the energy market.

So what should conservatives be saying about help to buy? Here’s  Albert Edwards, who heads up SocGen’s global strategy team:

‘Why are houses too expensive in the UK? Too much debt. So what is George Osborne’s solution for first-time buyers unable to afford housing? Why, arrange for a government-guaranteed scheme to burden our young people with even more debt! Why don’t we call this policy by the name it really is, namely the indentured servitude of our young people I believe it truly is a moronic policy that stands head and shoulders above most of the stupid economic policies I have seen implemented during my 30 years in this business.’

And to Andrew Bridgen from Fathom Consultingy:-

‘Had we been asked to design a policy that would guarantee maximum damage to the UK’s long-term growth prospects and its fragile credit rating, this would be it’

But who’s thinking long-term? Help to Buy is about the Conservative Party, about the next election, and how the Tories can use Help-to-Buy as an election promise.

PS A friend texts to say that property is a “broken market” which justifies state intervention. But this is what Ed Miliband says about energy, and David Cameron calls him a “Marxist” for intervening. I’d be interested to hear any CoffeeHousers point out a fundamental difference

On the evening of Wednesday 19 March 2014, Fraser Nelson, James Forsyth and Andrew Neil will be discussing what George Osborne’s 2014 budget means. Click here to book tickets.

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Show comments
  • rtj1211

    There is no difference between either side: all are as unprincipled as each other. All they care about is winning the election.

    The media is to blame in part for this: it bigs up winners and lambasts losers. I cannot think of anything more honourable than sticking to your principles and finding that, at this point in history, the British people reject you. They may return to you in 5 years though.

    Everything now is about mirage.

  • Daniel Maris

    There is a severe housing crisis – focussed on London and the south.

    If we are serious about tackling it we need an emergency programme.

    1. We need a technological programme to allow prefab construction of decent housing.

    2. We need an optimal population target. It isn’t the 75 million we are heading towards at speed. And it certainly isn’t the 100 million we will hit within a couple of decades if we don’t put into reverse our crazy policies. We should adopt a target of something like 50 million and work towards that.

    3. Each community needs to make available additional housing units – could be realised in various ways e.g. converting shop units to residential units or adding storeys to existing properties.

    4. We need to limit London’s growth and encourage businesses to locate outside the capital (this was the policy from about 1950-1975, a period of huge economic growth in the UK, before anyone claims it would harm growth).

    5. We need a policy of land reclamation in suitable areas – following the lead of the Dutch.

    6. For the next 30 years, central government and local government should be required to give up (at no cost) 2% per decade of their land holdings for residential development as affordable, social housing.

  • MC73

    If Albert Edwards really thinks what he is quoted as saying here then he is an idiot.

  • Baron

    Fraser, you’re spot on on this one.

    It’s a mana from heaven all around, including the Tories, whilst it lasts. Sadly, it’s building prosperity on sandy foundations. The cost of money cannot remain as low as it has been for the past five years, the QE cash the banks sit on, lend to the young ones and renters, won’t last forever either. When the former pushes up, the latter is spent we are in for a shock.

    And this time around there is nowhere to push the new debt to. Sovereign indebtedness is massive, the bond markets will ask for yields the country cannot afford. Still, who knows perhaps He runs a balance sheet, we can unload the new debt unto it.

  • Tom Tom

    Isn’t working much outside London except with 1% SDLT hom,es and New Builds so it must be hot money stimulating Cash Buyers in London rather than a housing recovery

    • BarkingAtTreehuggers

      …which means it isn’t ‘stimulating’ cash buyers in London because they are cash buyers. It is merely the excuse for…

  • BarkingAtTreehuggers

    Why is this so difficult to understand?

    We LOVE the fact that Osborne was working hard to ‘pay down the deficit’ whilst obsuring the fact that he was doubling the debt at the same time.

    We LOVE the fact how ‘share for rights’ obscured what was really going on – the explosion of zero hour contracts.

    We LOVE the fact how ‘help to buy’ in a <£600k bracket was designed to obscure that world-wide money printing has led to the parking of capital in prime real estate postcodes (£2m-£100m bracket) in England.

    What next – expand on this fun hearsay? Lovely!

  • ButcombeMan

    “Britain’s property market – new-build or not – does not need help from the taxpayer”


    Britain’s property market needs more movement, up and down which leads to more associated economic activity and faster circulation of money.

    The best way to do that (and this should have been done YEARS ago, at the height of the recession) is to smooth and streamline Stamp Duty Land Tax and ensuring that at the very top end, in London, it gets paid.

    The problem has always been that the myopic kids who run the Treasury know it is an easy tax to collect.

    But smoothing the tax and even loss of some revenue from it, would be easily compensated for, by VAT on associated trades, right through Estate Agents, Surveyors , Solicitors, Removal Firms, Builders, Decorators, Carpet and Kitchen equipment and so on.

    Osbourne, rather ridiculously, fiddled with “pastie tax” at the behest of the Treasury schoolkids. We know how that went. That was a real economic stimulus was it not?

    • LarryH77

      Agree. Tax on income and transactions is killing productivity. Taxes on wealth are better to hit non-productive idle wealth and asset hoarding/inflation.

      • manonthebus

        That’s right. That’s why thousands of French citizens have emigrated to Britain when Hollande extended the French Wealth Tax. We already pay a tax on housing. it’s called Council Tax.

        • LarryH77

          It’s well know that council tax is a terrible regressive tax that hits the poor hardest and amounts to 0.1% pa on London mansions.

          The majority would pay less under Land Value Tax.

          Expensive homes in the US pay far more and there’s no mass exodus.

          • the viceroy’s gin

            Eliminate the transaction tax and tax the property yearly and it might flatten out and stabilize the revenue cycle, as well.

            • BarkingAtTreehuggers

              Yeah, the Tea Party stooge advocating a mansion tax. How far you have come…

              • the viceroy’s gin

                …what are you blathering about now, lad?

                • BarkingAtTreehuggers

                  Yeeha, the Tea Party stooge advocating a mansion tax. How far you have come…

                • the viceroy’s gin

                  …your repetitive blathering is no more decipherable than single doses, lad.

      • ButcombeMan

        You are not agreeing with me then.

        Taxes on what you call idle wealth and assets, does not improve productivity.

        Taxation of wealth and assets saved from already taxed income will kill a countries economy. It will cause capital flight and emigration as the French have found out.

        For that reason and others I am firmly against the so called “Mansion Tax”.

        • LarryH77

          Wouldn’t you prefer money parked in static non-productive land/assets be invested in productive business?

          Try reading some independent analysis of our flawed taxation by people like the IFS.

          • ButcombeMan

            I am in the fortunate position of having both the intellect and the experience, from around the world, to enable me to independently assess taxation policies without the help of the IFS.

            Your remarks smack, of a more than slight, socialist mentality.

            We know where that gets those countries that apply that sort of regime too vigorously.

            • LarryH77

              The thing I hate most about politics is lazy following of a single ideology as if it’s a magic bullet. Cold non-political analysis can produce solutions that benefit everyone… Brand something that doesn’t match your ideology “socialism” if you must.

              Perhaps you can explain why those bastions of “socialism” France and Germany are around a third more productive per hour worked?

              • Samuel Kaine Wheeler

                Forget France and Germany, the next set of OECD productivity figures might actually put us behind Spain.

            • Samuel Kaine Wheeler

              Hong Kong has a form LVT and it’s constantly held up as some apotheosis of global capitalism.

        • Baron

          But, ButcombeMan, the mansion tax is a cert, just have patience.

          We are in that phase of political management Benjamin Franklin described thus: ‘If you ask the government to do for you everything you want, the government will take from you everything you have.’

          Those ruling us will need more than they can squeeze from existing taxes, they’ll need a new source, and just 1% of mansion tax would yield over £43bn today, will yield much more when Jeffrey’s scheme ends.

          Be ready, my friend, and prepare for it.

          • ButcombeMan

            Yes, since two parties now support it, it seems inevitable.

            Of course it will be very difficult to apply at the border (say 2 million) with loads of appeals and lots of costs. It will cause a property price slump in some parts of London. It will cause real hardship to those property rich and cash poor. It will probably kill off a few poor souls.

            It will not produce anything like your figure and will be costly to start up and costly to run. If eventually it works, they will come for thee and me next.

            Governments, especially Labour governments, are like babies, greedy mouths at one end and no sense of responsibility at the other.

            • Samuel Kaine Wheeler

              If granny wishes to spend the rest of her days rattling around her eight bedroom townhouse in Chelsea there are a host of companies that will allow her to release the equity while living there for the rest of her life. She won’t lose out, though the grasping progeny might.

              Alternatively she can do what Conservatives told people to do with the Bedroom Tax, and take in a lodger.

          • Samuel Kaine Wheeler

            If we’re quoting Franklin:

            “”All the property that is necessary to a Man, for the Conservation
            of the Individual and the Propagation of the Species, is his
            natural Right, which none can justly deprive him of: But all
            Property superfluous to such purposes is the Property of the
            Publick, who, by their Laws, have created it, and who may therefore
            by other laws dispose of it, whenever the Welfare of the Publick
            shall demand such Disposition. He that does not like civil Society
            on these Terms, let him retire and live among Savages. He can
            have no right to the benefits of Society, who will not pay his
            Club towards the Support of it.”

            • sarahsmith232

              Do you think that’s still a relevant quote though? I presume this is from their Constitution? Wasn’t the ideal end point the creation of a society which doesn’t hamper a person’s ability to pursue happiness? Since then there’s been a few more barriers put up to a persons ability to pursue happiness in an expensive part of the world. Extremely expensive private school tuition/need to provide deposits for the offspring/etc etc. The terms that hold together civil society since the 18th century have been altered somewhat, so I don’t think your quote is a relevant counter response.

              • the viceroy’s gin

                No, that quote isn’t from their Constitution. There was no such tax applied in their Constitution. Franklin may have wanted one, but he never came close to carrying the day.

                • sarahsmith232

                  Thanks for the info’.

              • Samuel Kaine Wheeler

                Yes, I do think it’s still relevant.

                No, it’s not from the American constitution, however Baron quoted Franklin in support of his position, when Franklin’s other writings indicate he would not have agreed with that position. If my response is not valid, neither is his original statement.

                It’s very simple. You did nothing to create the land. You control it simply because we as a society agree for you to do so. Therefore the terms of that control may be altered by the community at any time, subject to agreed democratic practices. If you don’t like it, feel free to move to a geographical location without such advanced social norms. Somalia perhaps.

                • the viceroy’s gin

                  “Therefore the terms of that control may be altered by the community at any time, subject to agreed democratic practices.”


                  No, not in the US you can’t. It’s a constitutional republic, not a “democracy”. That was likely Franklin’s most famous quote, when he was asked what type of government had been agreed: “A republic, if you can keep it.”

                • Samuel Kaine Wheeler

                  None of which has anything to do with anything I said. I didn’t say that this was the current situation in the USA.

                  Though of course, most of the USA has property taxes, which failure to pay means you forfeit the right to use the land.

                  And Franklin’s quote was distinguishing republic from monarchy. You can have elements of “democracy” (your word, not mine) in both systems.

                • the viceroy’s gin

                  Yes, it has everything to do with what you said. You claimed “democracy” facilitated instantaneous destruction of property rights, using Franklin as a proponent of same, but you’re flat out wrong.

                  Property taxes are collected by states, not the federal government. You’re wrong about that, too.

                  It’s a constitutional republic, is the US. It’s not a “democracy”, as you said it was and as you said it acts.

                  You should say less, lad. You’re quite ill informed, and it makes you look ridiculous when you blather so much.

                • Samuel Kaine Wheeler

                  I did no such thing. I don’t believe in a rights based framework so there’s nothing to destroy. And I did not use the word “democracy”.

                  I didn’t mention the federal government. I know property taxes are raised by the states, hence my use of the word “most” to indicate there are areas where it is not the case.

                  Again, I did not use the word democracy, and I did not say that Franklin’s personal views, which I agree with in this area, were ever enacted into law.

                  You should try reading comprehension darling, and arguing against what is actually said, not what you imagine.

                • the viceroy’s gin

                  Yes, you did precisely such a thing. It doesn’t matter what you believe in, “rights based framework” or otherwise. The discussion was about the US, lad. You based your proposed theft of property rights on the use of “democratic practices”, and let’s not cheapen yourself any further by burrowing into semantics surrounding the use of the exact word “democracy”, lad.

                  We were discussing the US federal government, lad. It doesn’t matter what you “mention”. And yes, you now know the federal government doesn’t collect property taxes, now that I told you so, while correcting your false statements.

                  You didn’t say Franklin’s personal views were enacted into law, and neither did anybody else, lad. Spare us your strawman building. It’s as cheap as the rest of your blather .

                  You should try educating yourself about the subjects you’re blathering about, lad. It’s shameful that you’re now attempting to slither away from your blatherings.

                  Just cease, is your best course, lad.

                • Samuel Kaine Wheeler

                  No, the discussion was based on Baron quoting Franklin.

                  Further, you made a snarky point about the USA being a republic, not a democracy. Your point was that I had made a category error, which is not the case with “democratic practices”, as there is no inherent contradiction between democratic practices and republican government. I chose my words carefully, you wilfully ignored them to trot a quote you thought would make you appear clever. This might work on your mates in the pub darling, but you’ll have to do better than primary school historiography with me.

                  Nothing in my statement was false, and again, you don’t get to decide what I was talking about based upon your own whims.

                  Basic comprehension darling, as anyone can see. I don’t know why you continue to try and correct things I don’t believe. I don’t think you know either.

                • the viceroy’s gin

                  No, the discussion was based upon your quest to advocate the destruction of property rights, lad, while also claiming the US as some grotesque form of case study for same. You got found out, unfortunately for you, as a blatherer.

                  Cease the semantics and hair splitting, lad. You thought your screwy ideas that property rights could be disappeared on a “democratic” whim in the US, and were unaware that such muppetry doesn’t fly in the constitutional republic.

                  You chose nothing “carefully”, lad. You’re a blathering idiot, and when easily and swiftly proven wrong, your cheap nature called for you to twist yourself into knots covering for your blathering.

                  I didn’t choose a quote to appear “clever”, lad. I chose a Franklin quote to make you look like an idiot, for having both blathered incoherently about the US system and cherry picking a Founder’s writings illegitimately.

                  Nobody’s telling you what you’re “talking about”, lad. We’re just watching you contort yourself upon being found out as a blowhard.

                  You should cease now, lad.

                • sarahsmith232

                  ‘It’s very simple’. Hmmm, I don’t know whether that prob’ applies.
                  There was a Channel4 discussion about ‘Benefits Street’, did you see it? There was a self-made millionaire plumber putting his two-penneth in, he was set upon by a, ok, you write about your Chelsea granny’s ‘grasping progeny’, the person that attacked the working-class self-made man was another e.g of your ‘grasping progeny’. This was one of Labour’s open-door offspring, demanding the politicians tax the millionaire to the hilt so that he could receive more money via the benefits system. The Labour party spent 13yrs only too happy to oblige his sorts’ demands. Problem – none of this was ‘subject to agreed democratic practices’.

                  If a person wasn’t prepared to be brainwashed by the BBC and wanted to know what the recent University College London report on the effects of non-EU immigration actually found then you’ll be a person that’s aware that non-EU, over a 16yr period, ’95 to 2011, COST the UK taxpayer £104 billion. Non-EU TOOK OUT, did not contribute more than they took out, they TOOK OUT MORE THAN THEY PUT IN, they cost £104 billion.
                  Your response to this is ‘If you don’t like it, feel free to move’, yes, well, many are doing, only it’s not Somalia because the people that don’t like it and so are doing the moving are ‘our best and brightest’, are affluent, are recent Russell Group uni’ grad’s who look to their future here and see a society that is v.v.v.far from a land of opportunity and is only a country that will hold them down. So they’re out. Again, this was not a type of society that anyone agreed to democratically.
                  I don’t think your response is intelligent. Yep, I’m not the sharpest knife going, you seem like you’d prob’ be quite intelligent but I don’t think your thinking is logical. Why should your rich granny’s ‘grasping progeny’ be less worthy than Labour’s unwelcome ones?

                • sarahsmith232

                  My response has been deleted. Ridiculous.
                  How to respond without setting off the Left generated PC Stasi, hmmm.
                  From the point of view of moving. Are you aware how many are doing? Oh, can’t be bothered to write anything now, so will try and write quick. Loads of Russell Group grad’s are moving, the affluent are getting out in their droves, Osbourne recently was quoted as saying something about spending zillions on our education system being the best investment in this society we can make. If the politicians don’t start taking notice of how many of ‘our best and brightest’ are fleeing and start recognising the reasons why then it’s not going to be the best investment in THIS society, it’s going to be the best investment the UK taxpayer will make in the Australian/American/Canadian etc societies.
                  I’m not allowed to comment on your ‘grasping progeny’, the Left’s thought police will be set off again.

  • sarahsmith232

    is the reason why I’m not understanding why the property market is broken ’cause I just don’t understand economics or ’cause FN’s friend doesn’t understand markets? The energy market isn’t free, markets can’t be free unless the state intervenes when a small number become too dominant. This isn’t a description of our of housing problems.
    You know, as well, was reading that every extra 250,000 people added to the population adds 0.5% to the GDP figure. Seeing that we got an extra 212,000 (v.v.v.conservative estimation of) last year, we can also knock off a good 0.5% (also a v.v.v.v conservative estimate?) from their ‘the economy is roaring back, you want the proof? – last year our GDP growth was a spectacular, whole 1.4%’ claim. So, in actual fact, really, it was more like in the 0.9%/0.7% range. No wonder they’re refusing to go anywhere near getting something done about immigration, that also might be part of their charade.

  • @PhilKean1

    Two certainties of life used to be death and taxes.

    Another variant of the certainty might also be –

    (1) – Tory commentators rightly criticising Cameron’s Government for being the most pro-EU, un-Conservative, irresponsible and sub-standard “Tory” administration in history.

    (2) – Those same Tory commentators marching eagerly to the polling booths in 2015 to vote for Cameron in an attempt to keep out a Labour Government which will be imperceptibly worse, and that would sign Britain up to EU economic and political union every bit as fast as Cameron’s.

    • HookesLaw

      This govt is a coalition. The tory party are actually offering a referendum on the EU and have introduced a referendum lock – opposed by labour at the time – and have also supported a private members bill on the subject of a 2017 referendum. A bill scuppered by labour.
      This so called un-conservative govt have carried through a 20 billion saving programme on the NHS and are shedding hundreds of thousands of public sector jobs closing quangos and reforming education and welfare such that labour are screaming blue murder.

      Your comments are crass thick prejudiced and stupid. Are you applying to be editor of the Spectator by any chance.

      • @PhilKean1

        You passionately want to stay in the EU.

        Of course you are going to support a strategy that stands no chance whatsoever of freeing the British people from an EU dictatorship modelled on the Chinese one-party-state system.

        • southerner

          Hooke is the archetypal Camerluvvie socialist.

          On other threads he has argued the benefits of the EU and immigration (ie the policy of all three Westminster parties). He flags up nonsense like the bonfire of the quangos (not even a tiny conflagration) and cites Labour opposition as “evidence”.

          The pretend differentiation going on a year from the election between the liblabcon is as predictable as it is disingenuous and only fools the fools.

          • HookesLaw

            Preposterous tosh.
            In other threads I have in fact pointed out the disaster that labours immigration policy has had on the country’s social fabric because they simply parked people on benefits – I also point out that we have seen millions of new jobs and must ask why our own workers cannot fill them and prefer to remain on benefits.

            I support the govt moves to cap benefits and get people working.
            Only in your thick stupid and deluded mind am I a socialist.

            The EU has trading and economic advantages. Its ‘law’ setting role is overstated and the ECHR has nothing to do with the EU.

            I do not agree with the EU political and common currency agenda; I see no need for and EU parliament. But the plain fact is if we left and joined the EEA we would see little difference. I am not going to let in labour if I can help it based on this marginal difference. Especially since Miliband has now said he will not allow a referendum and we will get one with the tories.

            • southerner

              I didn’t mention the past disastrous labour immigration policy. Re-read my post.

              Deflecting attention by arguing against something that has not been said is the first recourse of the lazy and thought free.

        • HookesLaw

          No – I am pleased that we will have a referendum in 2017. Kipper thickos want to scupper than chance.
          Your remarks show how deluded you are.

          • Wessex Man

            How very well dare you acc zzzzzzzzzzzzzzzzzzzzzzzzz

      • Wessex Man

        now listen here Hooky you kn zzzzzzzzzzzzzzzzzzzzzzzzzzzzz

        • telemachus


          • Wessex Man

            I’m afraid so you both seem to bring it on in equal measure.

    • @PhilKean1

      Yes, Fraser.

      Bad things are happening under this current bunch.

      (1) – Britain’s armed forces decimated and unable to defend British interests at home and abroad.
      (2) – Middle-class, hard-working, responsible, natural Tory voters penalised for political reasons – including many now dragged into the 40p tax band, and parents having their tax burden raised by the removal of the vital child tax credit.
      (3) – A referendum promise that was only made to win back voters from UKIP, that stands no chance of ever happening, or if it did happen, can’t be won as long as the leader of the Tories intends to join with his EU, Labour and Liberal friends in order to scare the British people into voting to stay in the EU.
      (4) – Help-to-Boom : Insultingly sold to us to assist 1st time buyers purchase their first home, but will – in reality – push prices even further out of reach of those buyers who were saving for a deposit the old-fashioned way.
      (5) – Giving 83 hardly-used, state-of-the-art Harriers to the Americans, boot-sale and bridge-burning style, for just £104 mln – the cost of just ONE, unproven, unreliable and over-complicated JSF.
      (6) – Deeming that legalising Gay Marriage was more of a priority than improving flood and sea defences, and launching an initiative to boost UK home-grown food production in order to stabilise prices and reduce the risk of future rationing.

      But I am guessing that Fraser will still be urging us not to vote UKIP, and to support Cameron, purely because he is scared stiff of another Labour Government.

      • HookesLaw

        Britains armed forces are not decimated.
        Including reserves they are increasing.
        We are investing in two massive aircraft carriers and the planes to fly off them and there is a properly funded programme of capital investment. I was labour who totally mismannaged the defence budget.
        There is no correlation – except in your clearlyu deranged mind – between flood defences (which have seen significant expenditure) and gay marriage.

        You are a crass ignorant bigoted fool.

        • Wessex Man

          I sometimes wonder why my quite reasonable replies to the mad ramblings of people like Hooky are flagged up waiting consideration and then lost and yet downright lies like these are allowed to stand.

        • starfish

          Unfortunately they cannot recruit reservists. So they are reducing. Sorting out the equipment plan while simultaneously underinvesting in people is not sound management expecially as people take longer

        • MirthaTidville

          And you Hooky know nothing about Defence…The Armed Forces are decimated, inadequate, poorly funded and demoralised. I have a NCO son presently serving in them, something you dont and for that situation I despise the Tories who caused it with their half cocked `Defence Review` put that in your pipe and smoke it

        • WillyTheFish

          “You are a crass ignorant bigoted fool.”

          Whereas you are merely rude.

  • HookesLaw

    ‘could lend taxpayers’ money to people to whom the banks would not lend (usually because they were deemed too large a credit risk’ — thats a gross oversimplification bordering on a downright lie that is totally unworthy of the editor of a supposed quality journal.

    For a fee the govt is assisting borrowers with their deposits since the banks have been forced to improve their reserves following the crash and are simply not lending to the degree they otherwise would.

  • White Wednesday

    Osborne desperately wants (and has been promised?) to take over the reins of power after 2015.

    But that depends on winning the election.


    • HookesLaw

      An interesting but groundless speculation.

  • alabenn

    Fraser, George W Bush you imply, initiated sub prime lending.

    I had thought that this homes for the unable to pay, was started by Clinton to secure the black vote in the US.

    • IanH

      … and you were quite right, it was Clinton that introduced it, and he also removed Glass Seagal act in response to Gordon Brown’s changes in 1997 which allowed Banks to buy Investment operations and caused American banks to move many of their operations to the UK. We all know the outcome of that.

    • HookesLaw

      Correct and the Democrat congress refused to support Bush’s attempts to stop it. This is another example which shows Nelson does not know what he is talking about.

      I think the initial law might have been passed by Carter and Clinton re-used it.

      • Wessex Man

        well there you go Hooky, you were right unless of course you are making up your original thoughts on thease matters.

        • HookesLaw

          I know I am right. I have commented on it before. Its nutjobs like you who make it up as you go along and refuse to face the truth when it stares you in the face.
          I’ve just done a quick check as you could have done and the Community Reinvestment Act came in in 1977. As I thought – by Carter.

          • Wessex Man

            I don’t care if Carter brought in free travel to Mars, I merely questioned if you knew about it at the time or if you ‘were right’ after the event with he aid Wikipedia!

  • Frank

    Weimar Republic Britain! I suppose the good thing is that it will be so clearly his fault that it will be easier to prosecute him in due course.

    • Wessex Man

      so my original reply below is in the Spectator words “hold on, this is waiting to be approved by Spectator Blogs.”
      and my original reply is-

      More chance of **** freezing over than any of the Westiminster Village accepting responsiblity for their actions!

      You couldn’t make it up!

  • anyfool

    When the unravelling of QE begins, inflation will take off, surely current house prices will look like a bargain.
    Parity with the dollar or £1.30 for a Euro will sort that out, unless they collapse first, the alternative Balls is even worse.
    When a Big Mac is a more attractive proposition than your house you will have reached the end of this folly.

  • MirthaTidville

    So lets see, how many Cabinet Ministers have property portfolios (in the wives/kids/maiden aunts etc names of course)??…and how many old Etonians (lots round Downing Street apparantly) in the same boat??..ditto lots..Then add in a Chancellor & PM miles out of touch who think a good unsupportable property boom is just the ticket to winning the next couldnt make this stuff up

    • LarryH77

      The PM and Chancellor have both made millions from their London properties and Tory-donor house builders saw a huge rise in profits last year, despite delivering even less homes than 2012.

      Vested interests like this are the reason I could never vote Tory.

      At least the previous bubble was down to complacency and reckless BoE interest rate policy rather than deliberate stoking.

      • Colonel Mustard

        And you think that Labour grandees don’t do this too?


        • monty61

          Indeed they did. But they aren’t in Government right now. The Tories are in Government. This policy is monumental stupidity.

      • HookesLaw

        The usual ‘coffeehouser’ clowns can be relied on to spout their usual rubbish I see. When they are so ably led by the editor why should we be surprised? Young people have alwys gone into debt to buy their house and drawn the benefit later in life.

        The Bank of England said in December that there was no housing bubble. Its funny how the usual suspect who regularly decry ‘lononistan’ and the westminster bubble are happy to look at parts of the capital and one or two other housing hotspots and use that as a barometer for the whole country.

        • LarryH77

          Are you seriously saying it’s good the Govt to be backing 95% mortgages when house prices are nearly back to their peak of ~7x wages and interest rates are at a record low?

          The figures for FTBs are that they’re borrowing more vs income than in 2007.

          • Baron

            You have it one, LarryH77, one can never say when a bubble gets going, no institution or a politician today have the ear, the respect of the people to stop it, but when it does burst, as it must, a meltdown will visit upon us once again.

            The good news is there are still few bankers left to take the blame again.

          • rtj1211

            Precisely: to get on the housing market now, you have to believe one of three things:

            1. Interest rates will stay low for at least 5 years.
            2. Your salary will go up significantly in the next 5 – 10 years.
            3. Property prices won’t crash in the next 5 years.

            If interest rates go up and your salary stays level, you may be looking at repossession and negative equity (since when interest rates go up, house prices go down).

            I can’t think of a worse time to get on the property ladder if you think that interest rates will go up significantly in the next 3 – 4 years.

        • telemachus

          Did you hear Nicola Horlick a notable city figure on this this morning
          Worth a listen

        • mickfealty

          This policy has put something between 30/40k on the price on the houses in our street. So I’m not sure whom it helps except those dependent on the machine for a living.

          If Labour had a functional response on the broader issue of housing (not least making the rental market more stable, desirable and long term) they could clean up.

          Is it a bubble? Not so long as supply is kept shorter than demand, as far as I can see. As to the interest rate rise when it comes, I shudder to think.

    • Chris Bond

      Another policy built to ensure a boom in UKIP support once it falls slat on it’s face.

      The possibilities for UKIP to mop up support from the the Conservatives, or Labour in the next term is mind boggling. Who ever gets in will make a mess, and UKIP will be there to accept all those upset voters.

      2020 will be one fascinating election.

  • WatTylersGhost

    Stop bleating Fraser, you have supported this Chancellor and his government for years, please don’t now start to question his judgment. The Cameron/Osborne pairing (a blend of incompetence and insincerity) was what drove me from their party years before they gained office.

  • telemachus

    It truly is time for a charismatic competent Chancellor

    • Dai Station

      You mean Ken Clarke

      • Wessex Man

        how dare you use such inflammatory language here!