Come and have a look – cheap, cheap debt! Very, very good – cheap, cheap debt! The £1 fish singer may have been deported, but his spirit lives on in George Osborne’s launch announcement today. The Tory response to Ed Miliband’s cost-of-living pledge seems to be more adventures into sub-prime. The Chancellor will press ahead with a second phase of his deeply controversial Help To Buy scheme – and three months earlier then he planned.
Recent history has taught us to worry when vote-hungry politicians try to manipulate the housing market to provide loans to people who otherwise could not afford them. This is why so many economists are amazed at what Osborne is doing. To see him announcing such housing decisions on a Sunday, to open Tory Party conference, will underline concerns that Help To Buy is not about economics but about votes.
I wrote recently about how bankers are being subsidised by Osborne’s Funding for Lending scheme, allowing them to ski in Verbier and drink champagne they could not otherwise afford.
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