Leading article: Mr Darling is making a bad housing situation worse

Share
Related Topics

Even by the devalued standards of this Government, it has been a week of dizzying incompetence. The Brown era, the "age of change", was supposed to be one of less spin. What we are witnessing is an age of less effective spin. Indeed, spin that has had a worryingly real and costly impact on people's lives. The stamp duty saga has been a perfect example of the failure of news management across government. It was never going to be a good idea to leak a market-sensitive move such as a suspension of stamp duty, and so it has proved. No doubt the motives were mixed, a wish to be seen to be doing something, anything, for hard-pressed first-time buyers, happily coinciding with the baser motive of wanting to distract attention from the leadership potential of David Miliband.

In all events, the stamp duty story has been a small disaster for the Government and left the property market in some confusion. Is a move on stamp duty "proposed"? No, it seems. Is it an "option"? Yes, it would appear. So is a move possible? Some sources brief that it is. When? Maybe in the pre-Budget report, scheduled for October, and maybe sooner, in the British economic recovery plan, or Berp as we may soon learn to call it. Clear as mud. Doubt about the future of stamp duty will put buyers off entering the market, the last thing it needs, and it is what ministers have now delivered. Staggering. It finds an earlier parallel in the selective leak of the collapse of Northern Rock last autumn, which led to a run on the bank and all the misery and hardship that followed for savers, people's jobs and shareholders who lost everything. The culprit has still to be identified, despite the efforts of the Treasury Select Committee. It should not give up.

Yet there is a larger paradox here. Is what we are seeing now an inevitable correction that we cannot, and should not, try to prevent – the necessary unwinding of the credit boom of the past decade? Do we want to go back to 130 per cent mortgages? What do Caroline Flint or Alistair Darling actually want to see? Obviously a housing crash is a "bad thing", but do we want to return to soaring property prices? If house prices were to be stabilised now, they would still be at completely unaffordable levels for many first-time buyers, even if they could find a mortgage, which, of course, they can't.

Ministers seem to be seeking an elusive "Goldilocks" scenario: a housing market that is not going up too much, nor going down too much, but which is "just right", or "stable" – where houses are cheaper but no one goes into negative equity. That is an impossible world. "Stability" in the real estate world would be impossible to achieve even if the Government and the Bank of England were to focus the entire panoply of fiscal and monetary policy on it.

The truth, as the banker Sir James Crosby hinted in his review of the housing finance market, is that ministers are almost powerless in the face of the global credit crunch. Better, perhaps, to focus aid on the most distressed sector – the housebuilders. It will need some boldness, but a public purchase of unsold properties would perform the neat trick of helping the sector, injecting funds and confidence as well as providing a ready new supply of social housing, which, we should recall, was such a feature of the Labour deputy leadership race last year, and about which many promises were made. Social housing has been shamefully neglected, and few would argue with investment in it at such a critical time. Politically it would pay a dividend too. It would be a clear signal of intent by the Government, for a change.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Renewable Energy Construction Manager

£40000 - £50000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Senior Wind Energy Due Diligence Project Manager

£50000 - £60000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Offshore Wind Project Engineer

£40000 - £50000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Subsea Proposals Engineer

£50000 - £55000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Day In a Page

Read Next
 

A woman’s power is in her laughter – no wonder men are scared enough they want to silence it

Howard Jacobson
The new lobby entrance to the Hotel Majestic  

Errors and omissions: There’s strength in numbers – as long as they agree

Guy Keleny
Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices