For a government desperate for power, giving free cash to individuals is a giveaway that’s hard to beat.
This is what Chancellor George Osborne did with the Help to Buy scheme aimed at helping people buy a new home with a government-backed mortgage. Parliament’s public spending watchdog the public accounts committee, which I sit on, has just examined whether this was value for money.
As a committee, we look only at the value for money, efficiency and effectiveness of a policy. And Help to Buy was always pure politics so our conclusions about lack of analysis of this £10bn of public spending are not surprising.
The committee was critical that little analysis was carried out of the effectiveness of the approach chosen to help people to buy. Other options might have had less direct relation to individual buyers but could have actually helped more people own their own home. Conveniently the government will not assess the impact of its various house purchase schemes until 2015.
The approach chosen may not be value for money, but for a party desperate to win power outright after 13 years of opposition and five years of stalemate coalition, it makes sense to them.
The public accounts committee is cross party and our reports are all agreed by consensus. While we have private debates we always agree on the final report. This gives a strength to our findings but does mean that they lack political comment.
However, as a Labour member of parliament, I have clear views about Help to Buy. It amounts to little more than an electoral sweetener for Tory swing and core voters.
There is a consistent Tory government strategy – they will always ‘bet the bank’ to boost the feel-good factor before an election. Years of pain (for people on low incomes or benefits), are always followed by a final year of illicit and unsustainable gain (for Conservative target voters). This is a pattern that all post second world war Tory governments have followed.
People need to know the economy is recovering and also that this recovery will benefit them and their family. The current government has failed miserably to deliver enough new homes to meet the demands of a growing population. If wages are not keeping pace with increased household costs, a Conservative government will work to create a feel-good factor by inflating the value of a home-owning family’s main asset.
All of this does nothing for my constituent who loves her job as a nurse. She rents, so no appreciating asset for her. Her travel for work around London costs too much. She is faced with increasing rents, after her landlord of 22 years sold her block of flats, and is priced out of the London housing market by a bubble that has been fuelled by government policy to boost demand that has not increased supply.
Every sinew in me screams against the unfairness of this giveaway for the haves, but Labour will have to convince people who have benefitted from it that we are worth backing. I applaud our approach on the private rented sector (where we need to do even more), but this will not be enough. In my borough more people rent than own their property, but overall we are a nation of homeowners.
I have worked on and campaigned on housing issues for over 20 years. It is clear that for there to be real value for money any housing subsidy has to be recycled. This means investment in bricks not benefits, and in homes for a lifetime rather than handouts for inheritance.
And that is why Labour must win the next election or we will see more of the same from the Tories.
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Meg Hillier MP is a member of the House of Commons public accounts committee
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Photo: Alex Pepperhill