EU-related hilarity with Grant Shapps

From City AM:

The Labour leader has nothing to say about the deficit; nothing to say about the economy; nothing to say about welfare; and nothing to say about Europe.

Contrast this with the Conservative Party, and our record… Time and again, our Prime Minister David Cameron has confronted, not ducked, the difficult decisions in Europe. He has cut the EU budget and fought to get British taxpayers a good deal.

Perhaps our Prime Minister has indeed agitated for increases in the total EU budget being slightly smaller than they otherwise would have been (difficult to prove either way), but the total budget has indisputably gone up, and as to the last assertion...

Ahem.

Again, in all fairness to the Tories (not that they deserve it), the massive increases in the UK's net contribution since 2010 is largely down to stuff which the previous Labour government had signed us up to, but surely an incoming government can tear that up and start again? That's a basic principle of the British constitution. So if he has "fought to get… a good deal", he's made a pretty shit job of it so far.

AstraZeneca: Some more splendid Indian Bicycle Marketing

From the BBC, 2 May 2014:

Conservative peer Lord Heseltine has said the government should have greater powers to intervene when British companies are the target of takeover bids by foreign businesses.

The former deputy prime minister told the BBC takeovers "could be very helpful", but the UK should do more to protect its national interests. This week, American drugs giant Pfizer announced it was bidding for British pharmaceutical company AstraZeneca...

From the BBC, 4 May 2014:

Ed Miliband has called for an inquiry into whether the US drugs firm Pfizer's planned takeover of AstraZeneca is in the UK's national interest.

The Labour leader has written to the PM to urge a stronger public interest test for takeovers of important businesses.

No 10 has denied Labour claims it is acting as a "cheerleader" for the deal, saying it is fighting for British jobs and British science.

From the BBC, 4 May 2014:

The Conservative Party Chairman Grant Shapps has said tests are in place to make sure that any takeover of AstraZeneca by Pfizer is in the public interest.

His comments come after Ed Miliband wrote to the prime minister calling for an inquiry and for a stronger public interest test for takeovers of important businesses.

Mr Shapps told the Sunday Politics that Labour's approach was "anti-business".

Is there actually a scintilla of difference between what Heseltine says and what Miliband says; or between the Conservatives' proposed "public interest test" and Labour's proposed "public interest test"?

Probably not, but nonetheless, Shappsy dutifully slags of Ed Miliband as being anti-business. Ed is quite happy about this, because it sends a message to potential Labour voters.

Presumably, it has been agreed that Heseltine might be a bit of an old fuddy-duddy but a true patriot at heart.

It has probably also been agreed that Labour will go on to accuse the Tories of kow-towing to large business interests at the expense of skilled employees in this country, or something.

Three years later, it reads like a parody...

From the BBC, January 2011:

People should no longer see property as an investment for retirement, Housing Minister Grant Shapps has said.

In an interview with the Observer, the Conservative minister said he wanted government policies to usher in a new age of "house price stability".

He suggests the government could help limit further house price rises by encouraging the building of more homes.

Mr Shapps said it was "horrendous" that house price growth had outstripped earnings since the 1990s.

"This government absolutely supports peoples' aspiration to own a home," he said. "But we also believe that (property) should be primarily thought of as a place to be your home."

The MP for Welwyn Hatfield told the paper he wanted people to look to investments that are supposed to offer security in old age, rather than rely on housing.

'Basic need'

He described the rise in prices between 1997 and 2007 as a "crazy period", which had left many younger people struggling to buy a home.

"I think it is horrendous that a first-time buyer would need to be 36 on average if they do not have the support of mum and dad," he told the paper.

"The main thing everyone requires for their subsistence is a roof over their head and when that basic human need becomes too expensive for average citizens to afford, something is out of kilter.

"I think the answer is house-price stability."

He spoke of a "rational" market in which house prices fell in real terms, by increasing by less than earnings.

Great British Understatement

From The Guardian, no less:

... in a letter to Treasury select committee chairman Andrew Tyrie, published on Thursday, Carney makes clear that while the Bank's financial policy committee (FPC) could advise the government at any time if Help to Buy is putting financial stability at risk, the final decision about if it should continue will lie with the Treasury.

"The FPC has no power to require the Treasury to vary the terms of, or close, the Help to Buy scheme," Carney writes in reply to a letter from Tyrie earlier this month asking him to clarify the Bank's role. "The FPC only has the authority to make recommendations in connection with such matters … the FPC is not constrained by the government's timetable for any such advice; it could make recommendations at any time."

That message appeared to contradict statements by senior coalition figures, including Conservative chairman Grant Shapps, who told BBC Radio in September: "We put the Bank of England solidly in charge of this scheme. We've said to them: 'You look at this every year, and if you're not happy with this Help to Buy Scheme, then you'll be [able] to cancel it."

Deputy prime minister Nick Clegg said of the policy last month: "Of course we need to moderate it, even turn it off if we think it is not appropriate and is providing inappropriate stimulation to the housing market. That is precisely why we have transferred the right to do that to the Bank of England so they can keep an eye on it – not politicians, not George Osborne, not the Treasury."

But not exactly as a "front page splash"

in fact, there ought to be a prize for anyone who can actually find it in the on-line version of the Mail ..

Daily Mail corrects misleading benefit statistics as DWP prepares for MPs' grilling**

An jolly tale from the New Statesman on how some Iain Duncan Smith arranged "scrupulously honest data" which was anything but was used in 6 "benefits bashing" articles by the Mail, which just goes to show the benefit of someone dreaming it up.
 
Oh and if you get tired of trying to track down that "correction", which NS readers will now be aware of but DM readers probably not, it is here.

Well it was at the time of posting, but being aware of what can happen I have also taken a screen grab in case it is needed as "evidence" later ... 

** the Department is scheduled for 2 Select Committee "grillings" tomorrow -

9.30am  Work and Pensions

 

Subject: Universal Credit: follow-up

 

Witness(es): Rt Hon Iain Duncan Smith, Secretary of State, Department for Work and Pensions, Lord Freud, Parliamentary Under Secretary of State for Welfare Reform , Howard Shiplee, Universal Credit Director General and Suzanne Newton, Real Time Information Programme Director, HM Revenue and Customs

Location: The Grimond Room, Portcullis House

 

and

 

2.30pm   Work and Pensions

 

Subject: DWP Annual Report and Accounts 2012-13: DWP Statistics

 

Witness(es): John Shields, Director of Communications and David Frazer, Director of Information, Governance and Security Directorate

Location: Room 5, Palace of Westminster

 

It is the latter grilling that the New Statesman article is referring to.  

 

"What's so wrong with 'creative statistics"" asks a bewildered Grant Shapps

"Picky Picky Picky Bureaucrats once again making everything unnecessarily difficult and complicated by this insistence on factual facts as opposed to propagandist fiction" says Conservative Party Chairman, adding "no wonder this country is in such a mess, when a respected government Minister gets upbraided for putting his name to a SpAd generated fairy tale designed to reinforce the shirkers, skivers, scroungers and cheats message the party has never peddled".

(Ha ha ha ha, it's that man again Update) The BBC are now running a piece about Grant's number-juggling which is drawn to your attention largely because it contains a marvellous quote from Iain Duncan Smith clone Liam Byrne:

Shadow work and pensions secretary Liam Byrne said: "This is a government that doesn't like to let the facts get in the way of a good story... but it really is outrageous that the Tories have been caught yet again misusing statistics for their own ends."

Yes, it truly is outrageous when governments get caught fabricating evidence. Thankfully, the Labour administration 1997 - 2010 was never guilty of such a thing, and certainly never got caught out doing it, then or since.

Update Update - Some even better Liam Byrne on the official One Nation: The Labour Party site.

Policy Exchange: half right. Grant Shapps: reliably wrong.

Spotted by Lola in The Telegraph:

In the South East, almost 100,000 council homes are worth more than the average privately-owned property, according to Policy Exchange.

The think tank estimated that selling social housing in expensive areas could raise at least £4.5 billion a year. The proceeds could be used to build houses in cheaper areas to tackle Britain’s housing shortage as part of the biggest building programme for decades.

Yippee, hooray, for more social housing. The problem is that councils will be much better at the 'selling off' bit and not so good at the 'building more social housing' bit.

Here are the numbers:

The Policy Exchange report found that almost four million houses and flats are let out to social tenants in England. However, 22 per cent are worth more than comparable houses in the same area — a total of 818,000 properties throughout the country.

Up to £159  billion could be raised in total if all social and council housing worth more than similar-sized properties nearby were sold across the country, the report suggested.

The think tank said properties should be sold off gradually, as they became vacant. At average vacancy rates that would enable the Government to sell 28,500 homes a year to private buyers, raising £4.5 billion a year, when debts have been paid down.

That could then pay for between 80,000 and 170,000 new social houses to be built a year, creating up to 340,000 jobs, the report argues.

£159 billion ÷ 818,000 = £194,000 each, seems about right.
£4.5 billion ÷ 80,000 = £56,000, seems about right (that's the build cost of a modest house/flat excl. land). Using 170,000 gives us £26,000 which seems on the unrealistically low side.

However, if £4.5 billion is our target figure which we want to raise from social housing in more desirable areas, the other approach would be to bump up the rents on those 818,000 homes by about £105 a week on average (this primarily affects central London and parts of the south east, which would solve the sub-letting issue to a large extent).
---------------------------------
Our Housing Minister responded thusly:

Mr Shapps said he was keen to study the report in detail and urged councils to consider following the key recommendation to sell their most valuable properties.

“It clearly makes sense to use housing stock as efficiently as possible,” he said. “Where you have houses which are worth millions, you could sell them and build a lot more homes to help sometimes ­vulnerable people come off the ­waiting list.

“It is blindingly obvious. And only a perverse kind of Left-wing dogma that appears indifferent to the suffering of those languishing on record waiting lists prevents this kind of common sense from prevailing.”

Fascinating. He supports the idea of selling off council housing for top whack. Funny that, it doesn't seem like five minutes ago that he supported selling it off for massive discounts:

The revamped Right to Buy, which will give 2.5 million social tenants the opportunity to buy their home with discounts of up to £75,000 was launched last month.

Mr Shapps has said his ambition is that, for the first time, every extra Right to Buy home sold will be replaced by a new affordable home to rent nationally. He said he had listened to views raised by councils on how they would deliver this ambition, and has agreed to extend their timeframe for spending the receipts from two years to three.

Ho hum. If you can build a new home for £56,000 and he's offering discounts of up to £75,000, doesn't that mean one-and-a-half fewer new homes for each old one sold?

If at first you don't succeed...

... fail, fail again.

Bob E has put together a list of some of the DoublePlusGood headlines on the DCLG's website:

November 2010: Shapps: We're lifting burdens from the backs of builders

March 2011: Grant Shapps offers "Build Now, Pay Later" deal to developers

April 2011: Growth plan to transform empty offices into new homes

June 2011: Government plans release of public land to build 100,000 homes

July 2011: Government announces new Affordable Homes Programme set to exceed expectations

December 2011: Grant Shapps launches £420m fund to get Britain building again in 2012

June 2012: Grant Shapps: Builders back the NewBuy Guarantee

The sum total effect of all this lifting, paying later, transforming, releasing, exceeding, launching and guaranteeing has of course been precisely zilch. New housing completions are hovering around the 100,000 level, just as the Tory voters were promised before the last general election.

But never mind, there's always time for another wizard "they own land, give them money" wheeze:

Ministers are to help developers build 200,000 homes which have been placed on hold, in an attempt to stimulate the economy...

Official figures show that local authorities have granted planning permission for more than 480,000 building plots in recent years. But work is only progressing on 136,700 of them. Development has been shelved at more than 81,000 sites and suspended or delayed at 226,000.

Many of the developments were given permission only on condition that they provide amenities for the community. But such deals are no longer viable because house prices have fallen, Mr Pickles believes. The brokers he is sending will renegotiate them to take account of the deteriorating economic climate.

There are various things which could result from this:

- the developers do indeed complete projects and bank larger gains, having being absolved of market risk;

- the developers play poker and mothball all developments on the assumption that they'll be able to get even better discounts on their s106 agreements;

- the developers continue to play for time; the reason the developments were mothballed is because they are waiting for an upturn in land prices.

- the developers assume that the Tories meant it seriously about not granting any planning permission in future, in which case they have every interest in using up their stock of 480,000 build permits as slowly as possible.

- there is a theory that new construction has stalled because banks are now unwilling to lend. If this is true, then again, nothing will come of this. I personally doubt that it is true; if a developer already owns the sites and has planning he's already earned the bulk of his profits (or paid the bulk of his cost of sales). They only need to borrow a bit of extra money to get their developments finished and sold, and that money can be repaid within a year or so out of the sales proceeds. This is not particularly risky from the banks' point of view.

Complete Home-Owner​-Ist disconnect

The Evening Standard (h/t SBC at HPC) kicks off with a fair summary of the position:

More than 3,600 former council flats in Westminster, bought under the Right to Buy scheme, are now in the hands of private landlords, transforming many council estates into buy-to-let goldmines, the latest figures show. Ironically, private landlords are now making huge profits by renting former council flats back to the council to house its homeless on housing benefits.

Westminster has been a champion of Right to Buy and has sold nearly half of its housing stock since the Eighties. Tenants who exercised their Right to Buy and then sold up often profited handsomely because of booming property prices in the borough, which includes some of the capital’s most expensive postcodes. Westminster has sold more than 9,000 houses and flats and expects to sell hundreds more during the next three years following the Government’s quadrupling of the maximum discount available to qualifying tenants to £75,000.

Properties are commonly rented out for more than £500 per week, over four times the average council flat rent. Owners, whether buy-to-let investors or former tenants, are free to rent out properties. But concern about profiteering landlords and housing benefit fraud has prompted a council and government crackdown. Hackney Council has decided to introduce a licensing system for private landlords (the first such regulation in London)...

Then come the fatuous comments from the Homey cheerleaders:

... while housing minister Grant Shapps wants to make sub-letting of council homes illegal. (1)

... Councillor Jonathan Glanz, housing spokesman, said: "Westminster supports the government’s Right to Buy scheme as it enables those who can afford it to secure a foot on the property ladder. (2) The revenue from each property is reinvested to provide another much needed affordable home in Westminster." (3)

1) I completely agree, let's make it illegal. But there is not the blindest bit of economic or moral difference between Mr A who acquired his council flat at a massive discount a few years ago, is paying £100 a week mortgage interest and renting it out for £500 a week and Mr B who is paying a £100 week rent to the council and is sub-letting for £500 a week. So why not make both these things illegal?

2) The whole RTB debacle has clearly reduced the number of people who can "secure a foot on the property ladder". At the very least, it has pushed up the rents which non-owners have to pay, thus leaving them less money to spend in the real economy or to save up towards a deposit. Glantz appears to be utterly clueless as to any of the facts and figures presented in the article?

3) That's just an outright lie. Even if it weren't, then it doesn't make sense. If you own a car and are happy with it, would you rather sell it at a discount and then buy a new one, or just keep your current car? And if "affordable housing" is a good thing (and it is), then why not just build more without selling off the existing stock? Or, if Westminster Council had retained its entire existing stock and bumped up the rents to (say) £300 a week, that would give them a budget of £300 million a year to spend on building new housing (i.e. six thousand flats a year).

Home-Owner-Ists scale new heights of vindictiveness and hypocrisy.

From The Metro:

‘Privileged’ residents on salaries of between £60,000 and £100,000 will be targeted as housing minister Grant Shapps reforms the ‘lazy’ attitude on social housing.

He said: "For far too long, millions of people on waiting lists have watched helplessly as high-earning social tenants continue to occupy homes designed to help the most vulnerable. These high-income tenants are not only blocking homes that could benefit those in greater housing need, they’re also relying on poorer taxpayers to subsidise their lifestyle."

The average subsidy for such tenants is worth £3,600 a year, the Department of Communities and Local Government says. Mr Shapps added: "If they want to continue using this precious national resource, they will pay for the privilege."

Grant Shapps feigns surprise when people accept offer of free money...

From the DCLG:

Grant Shapps welcomes overwhelming demand to Get Britain Building

A Government scheme to get builders back on stalled sites and work restarted on homes has had an overwhelming response and is three times oversubscribed, Housing Minister Grant Shapps has today revealed.

The £420 million Get Britain Building fund is a key tenet of the Housing Strategy. Launched just two months ago, the Get Britain Building fund has seen a total of 176 expressions of interest - meaning the programme is now three times oversubscribed.

Mr Shapps argued that the short, simple and straightforward application process has made it easier for smaller building companies, as well as larger developers, to bid for funding...

Just for a second, let's try and think up something a bit different, instead of following the mantra "they own land, give them money", shall we?

How about going to the people who put their projects on hold half way through (in order to speculate on rising land values), and telling them that if their projects aren't finished as agreed in the planning application/permission within X months, that the planning permission will simply be withdrawn and they will be ordered to demolish what they've started?

I mean, surely the planning permission says something like "You have permission to build 20 houses" and not "You have permission to dig twenty foundations and complete the ground floors on half of them and get up to the rood timbers on the others and then to leave them standing for months or years", and if people don't comply with planning, then the local council is entitled to revoke it or to demolish what has been built.

They own land! Give them money!

As I said, this is all getting beyond satire, here's the umpteenth re-hash of a scheme to subsidise purchases of new housing:

A government scheme aimed at kick-starting the housing market by underwriting 95% mortgages will be available to people spending up to £500,000 on a new-build property, the housing minister has announced...

Unveiling more details, housing minister Grant Shapps said he wanted to "go the extra mile" for those aspiring to get on the housing ladder. He said that while buyers typically needed to raise £40,000 to put down as a deposit, this could help those with just £10,000 to buy a home of their own...

"The pattern of the past has been to produce endless policies and initiatives that simply gather dust on Whitehall shelves and lead to inaction and inertia," he said. "But with the prime minister putting housing centre stage on the road to economic recovery, I am determined we shall not repeat these mistakes of the past."

Grant Shapps said it, not me...

Rather bizarrely, Grant Shapps has strayed from the Home-Owner-ist path of True Righteousness, which is to give money, directly or indirectly to people who own land, who wish to buy land or who collect rental income (a lot of which is disguised as mortgage interest) without ever asking for anything in return.

His new bright idea is for local councils to build new housing specifically designed for renting to elderly down-sizers, who would of course retain ownership of The Family Home and have the rental income collected and passed to them by the local council. Of all his cunning schemes to give land owners money, this is the least-bad, because at least a few crumbs fall from the table for young tenant households (who can now move into, and pay rent for, somebody else's Family Home) and the construction sector.

Suffice to say, the Home-Owner-Ists have unleashed their usual shit storm from Hell upon him, wailing on about "state interference in telling people where to live [blah blah blah]". Welcome to the club, Shappsy!

Now, it strikes me that the massed ranks of Home-Owner-Ists, Baby Boomers and pensioners absolutely love state interference:
- state interference in restricting planning permission to prop up prices, which clearly amounts to telling young people where to live,
- state interference in taxing other people's incomes to pay for the stuff that props up land values,
- state interference in taxing other people's income to pay for their old age pensions,
- state interference in propping up rents via Housing Benefit,
- state interference in selling off taxpayer assets at undervalue to aspiring owner-occupiers,
- state interference in keeping interest rates down and inflation up to mask nominal falls in the value of the precious houses,
- state interference in shrinking taxes collected from the natural source of national revenue, etc.

But they don't like it when the boot, or should I say fluffy slipper, is on the other foot, or should I say little toe.

H/t Drewster at HPC.

Grant Shapps doesn't do logic

From the BBC:

Plans to make it a criminal offence for council tenants to sub-let their homes are to be unveiled by the government. A consultation will also detail plans to force thousands of tenants earning £100,000 or more to pay market rates. An estimated 160,000 tenants sub-let their homes, which is not currently an offence...

Housing Minister Grant Shapps said: "For too long this country has turned a blind eye on the multi-billion pound problem of housing tenancy fraud and abuse. This year the coalition is determined to end that scandal. Why should someone on a six-figure income enjoy a fantastically subsidised council rent, whilst those in real need languish on the waiting list? And why is it so easy to get away with sub-letting your council house at market rent and simply pocketing up to £1,000 a week at taxpayers' expense?"

From Dash 24, two weeks earlier:

The housing minister Grant Shapps plans to increase the cap on discounts for council tenants to buy their homes to £50,000, while pledging to replace every sold home with a new affordable one. Mr Shapps said the restrictions on discounts over the past few years have made Right to Buy (RTB) meaningless in many parts of the country, with fewer than 3,700 sales last year compared to a peak of 84,000 less than 10 years ago...

This will mean, for example, that someone in the West Midlands who had been a tenant for eight years on an household income of £20,000 could buy their £90,000 flat with a discount of £50,000 compared to £26,000 previously - effectively doubling their discount. In London, a tenant for five years buying a flat worth £160,000 would also receive a discount of £50,000 - more than three times the previous cap of £16,000.

So, to recap...

- 160,000 tenants sub-letting their council houses and making a handsome profit (because council house rents are lower than market rents) is A National Scandal, but

- allowing (say) 84,000 tenants a year to lock in an extra £50,000 profit by allowing them to buy their council houses at undervalue, as well as 'up to £1,000 a week' rental income by subsequently renting them out is... what, exactly?

Or to turn that into a question, if subletting council houses at a profit of 'up to £1,000 a week' is being done 'at taxpayers' expense', is selling off council houses for a discount of 'up to £50,000' not also something being done 'at taxpayers' expense'?

We own land! Give us money!

From Housing Excellence:

Housing Minister Grant Shapps today reassured anxious homeowners struggling to pay their mortgages of the wide range of support available to help them keep their homes, and ensure that repossession remains the last resort...

The Minister made clear that just as the Government is providing help* for people wanting to get on the property ladder, a range of support* is also available to keep them in their homes and avoid the threat of repossession... Also over the next two years the Government is investing more than £200 million into the Mortgage Rescue scheme. The scheme, available through local authorities, is designed to offer a last resort to the most vulnerable families to avoid repossession...

Notwithstanding that £200 million is a drop in the ocean, isn't this just another example of The New Maths or something? There's a fixed amount of housing, so for every household 'helped to stay on the property ladder' there is another household who are being prevented from 'getting on the property ladder'.

Whichever group you subsidise, you end up with higher house prices and higher profits for the banks, and if you subsidise both you just double up this effect. Conversely, if we scrapped the equal and opposite subsidies, we'd probably end up with a higher level of owner-occupation, at a fair old saving to the taxpayer.

*"Help" and "support" are NewSpeak for "give money to".

Good Thing/Bad Thing

Over-occupation and under-utilisation of housing is A Good Thing

The Intergenerational Foundation had the gall and temerity to produce a report (Hoarding of Housing), pointing out that:

* Under-occupation of houses is encouraged by the tax [and welfare] system and there are 25 million [unused] bedrooms in under-occupied houses in England... Under-occupied housing has increased from 20% of all households to about 33%, according to the English Housing Survey.

* The divide between the housing-haves and housing-have-nots has moved from being one dominated by class to one dominated by age. The huge increase in housing wealth by the older generation was broadly matched by a big increase in mortgage debt by younger people. This is important as housing wealth has grown rapidly from about the same as GDP in 1980 to about twice that level over the last 30 years.

They offer a few commonsense policies on page 28, if you're interested.

The Powers That Be promptly unleashed the inevitable shit storm. Housing Minister Grant Shapps, bowing to his masters, said "Whilst this report makes interesting reading, we do not agree that people should be taxed or bullied out of their homes. Instead we will work with families to ensure that housing becomes more affordable over time."

What he really means that it fine to tax and bully young people out of the possibility of home-ownership (or at least making them pay the earth for it), and by implication that the UK government sees over-occupation, especially by older people, as A Very Good And Desirable Thing Indeed...

Over-occupation and under-utilisation of housing is A Bad Thing

... or does it? Meanwhile, a different government minister talks sense and acknowledges that it is A Bad Thing:

Spare bedrooms for people in social housing are a luxury the country can no longer afford, a minister has said. Tenants with spare rooms will lose £11 a week in housing benefit under changes going through Parliament...

Asked by You and Yours presenter Julian Worricker, if a spare bedroom should be regarded as a "luxury" for those in social housing, Lord Freud said: "Exactly - we have got a housing benefit expenditure that is simply out of control. It's very unfair for taxpayers to have to fund people to live in property that's larger than they can afford themselves. And also that means that people don't make the same choices, and are faced with those choices, that they would if they were non benefit recipients."

Can they make up their minds, please?

Another day, another desperate throw of the dice (45)

From The Daily Mail:

Banks should offer ‘mates mortgages’ to help groups of friends buy a home together, a Government minister will say today.

Grant Shapps will urge lending giants to send a lifeline to the record numbers of first-time buyers struggling to get on the property ladder. The housing minister said that without urgent help from banks a generation of young people would be locked out of the market. The answer, he suggested, was a radical and new type of lending that he called ‘mates mortgages’.

In most parts of the country it is almost impossible for a young person with a full-time job to buy a home on their own. The average salary of workers in their 20s is £21,000 whereas the cost of the average home is around £160,000. As a result, only those on much higher salaries or with family money can put down a deposit on a house.

Mr Shapps said: ‘If there are mates who are perfectly capable of paying monthly mortgage payments but are struggling to fund a deposit of their own, there should be straightforward options to unite with their friends and take the first step on to the housing ladder together.’

I'm sure you can all see several flaws in that.

Same day, another reckless throw of the dice (43)

From the DCLG website:

Grant Shapps said: "With 80 per cent of young first-time buyers depending on parental help, I am determined that we pull out all the stops to help those who want to take their first steps onto the property ladder.

"FirstBuy will do just that - a Government-backed scheme making £500 million available to offer a valuable alternative to the Bank of Mum and Dad. Over the next two years, this will help as many as 10,000 people in England to get that much-needed deposit together and realise their dreams of owning their own home.

"And because this help will be available on newly-built properties, it will also offer a much-needed boost to our housebuilding industry, supporting thousands of jobs across the country."

Stewart Baseley, executive chairman of the Housebuilders Federation, said: "Firstbuy will help first time buyers, boost economic growth and provide a vital shot in the arm for the house-building industry. Our members have reacted decisively to support FirstBuy and recognise the scheme is an important first step."

Or, they could just stop trying to prop up house prices and let young people get on the ladder without being saddled with extra debts of £50,000? That would be good for the taxpayer, good for the first time buyer and good for the economy. It would, of course, be bad for existing home owners, land owners and banks... ah, right.

And no, propping up house prices and underwriting the value of home-builders' land banks does NOT boost economic growth, in case you were wondering.

Bob Crow: Man of Principle

I see that the Homeys have got it in for Bob Crow. From The Metro:

The militant head of the Rail, Maritime and Transport union (RMT) is believed to pay half the market rate for his taxpayer-subsidised house (1) despite being paid £145,000 a year. (2)

Mr Crow rents the three-bedroom home for an estimated £150 a week while estate agents say it would cost £300 a week in the private sector. The union firebrand has benefited from a loophole in housing rules (3) which do not consider an occupant’s income once the family has a tenancy.

Mr Crow and his partner Nicola Hoarau have lived in the north-east London property since 2001 and saved an estimated £78,000 on renting costs. (4)

Housing minister Grant Shapps said: ‘With nearly 5million vulnerable people languishing on housing waiting lists, I would have thought a highly paid union baron would feel somewhat awkward taking advantage of publicly subsidised housing.’ (5)

The RMT said Mr Crow ‘turned down the opportunity to buy his council house at a substantial discount because he believes social housing stock should be available for future generations. (6) Bob Crow makes no apology for living in social housing,’ the union said.

1) It's not taxpayer-subsidised at all. Don't tell me that the cash cost to the council of maintaining that house is anywhere near £7,800 a year. And if you want to argue that rent foregone is a 'cost' to the taxpayer, then so is the fact that owner-occupation is not subject to taxation (Schedule A or Land Value Tax).

2) Yes, he is a militant, what relevant does that have (and no, I like neither his politics nor the strikes he calls once or twice a year), and he appears to be vastly overpaid, but that's up to RMT members - and on that sort of salary, he must be chipping in about £70,000 a year in PAYE, NIC and VAT, so he's more than paying for any subsidies he does get (to the extent he gets any, which he doesn't) and a damn' sight more than most people.

3) It's not a loophole, FFS. Those Are The Rules. If the social rent is set at £150 then it's £150 regardless of income - if you earn very little or nothing, then they don't reduce the rent, what they do is allow you to claim Housing Benefit. Could we arrange this better? Yes of course: to the extent that social housing is undersupplied, we could charge the lower of market rent and (say) twenty per cent of a household's income, that seems more sensible.

4) Sure, he has so far paid £78,000 less than he would have paid had he been renting privately, but what if had bought a similar house privately, which might have cost £100,000 ten years ago? Instead of receiving £78,000, the taxpayer would have received precisely £1,000 Stamp Duty and f- all else. And he's not married? So f- what?

And if our Bob stays there for another ten years, he'll have paid £156,000 to the taxpayer and still own nothing, and he will still have to pay something - to the taxpayer - for the rest of his life. If he'd bought privately, he would easily have paid off his mortgage by then...

... which leads me to the conclusion that a lot of people in social housing have ended up paying more for their housing than owner-occupiers; so it's not social housing that's subsidised at all - if anything, owner-occupied housing is subsidised, because they pay net nothing to the taxpayer (and on the whole, make tax-free capital gains) but social tenants, on average, do pay something (however little).

5) Shappsy has made a fair few quid off the housing bubble (fair play, so did I) so that's a tad hypcritical. And if he's so bothered about the one family whom Bob Crow has displaced, he's free to divert the £7 billion a year currently wasted in Housing Benefit for private tenants (yes, that is a real cost to the taxpayer) into building 200,000 new units of social housing every year. Twat.

6) Like I said, Bob Crow may be vastly overpaid, but he appears to have some principles. If the scoop had been that he owns half a dozen buy-to-lets, then things would be different.

Grant Shapps on top form

From The Independent:

Grant Shapps... pointed out that thousands of potential buyers would be able to afford to become owner occupiers if the new [stricter lending] regime led to steeper house price falls.