Monday, March 23, 2015

George 'Two Nations Toryism' Osborne

What is the Conservative Party for? Benjamin Disraeli is credited with forging a One Nation vision for it and a decade ago David Cameron was spoken about as having taken on Disraeli's mantle see: Daily Telegraph from 2006 . Remember the Big Society of the last election?

So what, at the bedrock, does Conservative policy look like as seen through the March 2015 Budget? Is Toryism about One Nation any more?

The most telling measure is the new Help to Buy ISA for aspiring first time home owners. For every £200 you save the government will add £50 up to a limit of £3k for £12k saved.
Says Jonathan Eley in the Financial Times 21 March: 

'Housebuilders, existing homeowners and estate agents... feared a tax raid in the form of capital gains tax on the sale of high-value primary residences. Instead they got a shiny new subsidy from taxpayers... they can scarcely believe their luck. This is irresponsible policy making.'  

So the Chancellor is keen to boost the housing market at the bottom end but this will add to house price inflation and make homes less affordable for those who cannot meet the criteria for the new HTB ISA. The 2013 Budget introduced an earlier Help to Buy shared equity scheme. That was handled through housing associations, which tempers the price effect of the subsidy on the general housing market; but this HTB ISA is a direct action into the housing market and is likely to boost prices. By this measure this Tory Chancellor is further forcing apart a divided nation, separated by the way they have to provide for their housing needs: The Renters and the Owners.

Paul Johnson of the Institute for Fiscal Studies, commenting on the Budget in The Times March 21, 2015  'Both parties need to come clean on cuts'  - has it that there will be a £10bn gap in government financing which will involve more cuts than specified now. He reports that the Chancellor says he will cut 'welfare' to achieve this. Johnson says that this is likely to mean a reduction in support for housing benefit as housing rents have soared due to demand and the housing benefit bill is stretched. He thinks that the support link to actual rents may be broken so affecting social housing tenants as well as private renters. So with welfare cuts proposed the nation is to be further spilt, and probably again through housing costs.

So the Conservatives are a long way from a modern version of Disraeli's One Nation in these policies. Look at this report in the New Statesman 24 September 2014  about Mansion Tax:

'When Miliband first adopted the idea in 2013, the Tories responded by writing to their wealthy donors soliciting funds to campaign against a 'homes tax' '  .

There is nothing obvious in the Budget to bring house prices down to more affordable levels, such as a annual levy on land values, which would also automatically promote house building. George Osborne has finally killed off any hope of David Cameron's Big Society bringing an equitable housing policy and Disraeli must be turning in his grave.

Posted by Charles Bazlinton: More ideas for a fairer society in The Free Lunch - Fairness with Freedom  

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