George Osborne's 'housing revolution' election pledge
04-06-2015
Exclusive interview: Chancellor announces election pledge to get 2.4 million first-time buyers onto the housing ladder in a 1980s-style home ownership boom
By Tim Ross, Senior Political Correspondent
• Osborne says "my best friend" David Cameron should be Tory PM for next five years
• Ed Miliband poses a bigger threat to the economy than Greece, Chancellor says
• Tories plan to double the number of first time buyers to 500,000 a year by 2020
• Help to Buy, Right to Buy and Starter Homes schemes will drive property "revolution"
• Tories are leaving "options open" to bring forward tax cuts sooner than planned
• Pension savers told to "take your time" before cashing in savings
“Who is my best friend in politics?” George Osborne asks. “David Cameron, I would say.”
The two most powerful men in Britain are godfathers to each other’s children and have been close since entering Parliament together in 2001.
“He is someone I trust and whose judgment I absolutely rely on. Living in Downing Street, you share a lot of similar experiences and pressures.”
The Chancellor has been close to the Prime Minister since they both entered Parliament together in 2001 (Heathcliff O'Malley/The Telegraph)
With the election less than five weeks away, however, both men could soon find themselves suddenly unemployed - and ejected from the Downing Street flats where they have been tenants for the past five years.
If they are, the timing will be deeply ironic. Not only has the government recently helped a record number of people into jobs, but the Tories are preparing a housing revolution with a new pledge - announced today - to give one million more people the security of a home of their own.
In an interview on the campaign trail with The Telegraph, Mr Osborne sets out his plan for this “massive” 1980s-style boom in home-ownership; hints at faster tax cuts after the election; and plays down the idea that he could one day take over from his friend in Number 10.
George Osborne helps make the tea (Heathcliff O'Malley/The Telegraph)
HOME OWNERSHIP
“This is the best part of my job. It’s the thing that makes my job worth doing,” Mr Osborne declares, as he trudges through the mud on a soggy building site outside Mansfield, Nottinghamshire.
The 43 year-old Chancellor has shed his Westminster suit and tie and is instead wearing the uniform he most likes to be seen in: a hard hat and “hi-vis” jacket.
Despite the conditions, his enthusiasm is clearly genuine. He has just spent half an hour chatting to Charlotte Spencer and Christian Speight, a young couple who have used the government’s Help to Buy loan scheme to purchase a home under construction.
George Osborne in Nottinghamshire with new home owners Charlotte Spencer and Christian Sleight (Doug Marke/Page One)
“It reminds me of why we are doing this. Ultimately this is about people’s aspirations, their futures and their dreams,” he says.
“The Conservative Party is the party of home ownership. It’s the party of helping young families get on the property ladder, helping people move up the property ladder.
“We inherited a situation five years ago where the property market had crashed, there was no house-building at all.”
But through schemes like Help to Buy, young families can now get a mortgage again.
“I think we can go further,” Mr Osborne says. “In the next parliament I would like to see over a million more people helped into home ownership by a Conservative government.
“I would like to see us double the number of first time buyers, up to half a million. That is the kind of level we saw in the 1980s. There is no reason why our country can’t achieve that again,” he says. “That’s a goal we set ourselves today.
“I think we can deliver a revolution in home ownership and make this the home-owning democracy, the home-owning society that I think is one of the Conservatives’ core beliefs.”
Mr Osborne chats with Charlotte Spencer and Christian Sleight in their new home (Doug Marke/Page One)
RIGHT TO BUY
Mr Osborne says he will meet these ambitious targets through the expansion of schemes such as the Help to Buy loans, in which the government takes a stake in new-build properties to help first-time buyers.
The new “starter homes” scheme, offering 20 per cent discounts, has proved popular and a “rejuvenated and refreshed” Right to Buy policy, the totemic Tory reform of the 1980s, will also be key, he says.
One possibility for inclusion in the Tory manifesto is a radical expansion of Right to Buy, Margaret Thatcher’s plan which gave council tenants the power to purchase their homes.
George Osborne helps make tea in 26-year-old insurance adjuster Craig Mills' kitchen in the home was bought with "Help to Buy" scheme. (Heathcliff O'Malley/The Telegraph)
Critics say it has cut the number of council houses available to the poor but senior Tories want the right to be extended to allow the sale of housing association properties. Mr Osborne does not rule it out.
“We will see going forward,” he says, although he is not ready to propose such a plan “right now”.
What about forcing councils to sell their most expensive properties in order to pay for cheaper housing?
“That’s something we have raised,” the Chancellor says. “I think councils do have to justify why it is they hold onto very expensive properties, properties which many people couldn’t afford.”
PENSIONS REVOLUTION
Osborne: 'No need to rush into making a decision on pensions'
Mr Osborne argues that his bold new home ownership targets fit with the party’s record of radical reforms intended to put more people in charge of their own assets.
This week, two million over-55s with a collective £140 billion of pension savings will get unprecedented new freedoms to access their money and spend it as they wish.
Instead of being forced to buy annuities, which can offer poor value, they will be able to put the money towards other types of investment, such as buy-to-let homes.
Mr Osborne urges savers to “go and explore this new world” of control over their money on what has been labelled “pension freedom day” on Monday.
“Many people will have assumed they have to buy an annuity,” Mr Osborne says. “That’s not the case anymore.” But he adds: “Take your time. You don’t have to make this decision today or tomorrow.”
As he prepares to pour, George Osborne studies a Manchester United mug in Mr Mill's new kitchen (Heathcliff O'Malley/The Telegraph)
DEATH AND TAXES
If the Tories win a majority, they have promised to cut taxes for the middle classes. They will raise the threshold at which people are drawn into the 40p higher rate of tax to £50,000, by 2020.
Mr Osborne, who is destined to stay as chancellor if the Conservatives win, says he is keeping his “options open” about the timing of the tax cuts and could move sooner. “It will depend on individual decisions in individual budgets,” he says.
“We are absolutely committed to reaching that £50,000 threshold so you don’t have people on middle incomes increasingly sucked into the higher.”
Many Conservatives hope Mr Osborne will also revive his pre-2010 election pledge to cut inheritance tax by raising the threshold at which estates become liable to £1million.
“We want inheritance tax to be paid by the rich,” Mr Osborne says. “But I don’t want to say much more about it.” Perhaps he will be more forthcoming in the manifesto.
The Chancellor practicing his handyman skills in Nottinghamshire (Doug Marke/Page One/Nottingham)
THE ECONOMY
Throughout, the Chancellor is careful not to raise expectations of pre-election “sweeteners”.
For Mr Osborne, who has been dubbed “the austerity chancellor”, the priority must always be tackling the deficit. This will require further painful cuts after the election.
For many Conservative MPs and traditionalist supporters, the biggest fear is that the Treasury axe will come down again on defence budgets.
Mr Osborne offers some reassurance, promising to protect “regular” troop numbers. “I feel an absolute responsibility to make sure that the military has the resources to defend our country,” he says. “We are not people who want to leave our country weak and defenceless.”
But the threats to the recovery are real. “The situation in the Eurozone remains very fragile,” Mr Osborne warns. Greece could end up leaving the euro “by accident or mishap”, and this would hurt Britain.
Mr Osborne quizzes Craig Mills about his new home in the company of Tory PPC Will Quince (right) (Heathcliff O'Malley/The Telegraph)
“But I think the biggest risk at the moment is very clearly the possibility of Ed Miliband in Downing St.”
So Mr Miliband is a bigger threat to the economy than Greece? “The recovery is on the ballot paper on May 7 and if people vote for Ed Miliband in Downing St the recovery will end. We will go back to the economic chaos of five years ago.”
The prospect of a Labour government propped up by Nicola Sturgeon’s Scottish National Party “would be an unholy alliance between the people who want to break up the country and the people who want to bankrupt the country”.
Last week’s televised leaders’ debate showed that Mr Miliband would be “completely overshadowed” by Miss Sturgeon in any Labour-SNP alliance, he says.
THE ELECTION
Despite Mr Osborne’s warnings of the dire consequences of a Labour victory, the Tories are failing to take a clear lead in the polls - and time is running out.
The Chancellor insists that the Conservatives have seized the momentum and are “confident” of winning a majority.
“I have done plenty of elections where there is a real air of defeatism,” says the Chancellor, who worked on John Major’s doomed 1997 campaign which led to the Blair landslide. “I detect the opposite here.”
LEADERSHIP
What about his own future? Does the Chancellor agree with Mr Cameron that he would make a fine leader of the party and PM one day?
“I am his friend. I am his political ally. I am his Chancellor. I am fighting this election to make sure that David Cameron is the leader of this country for the next five years,” Mr Osborne says.
The question arises only because Mr Cameron himself named the Chancellor as a potential successor last month.
Chancellor of the Exchequer George Osborne during an interview with Tim Ross (Heathcliff O'Malley/The Telegraph)
Leadership talk first swirled around Mr Osborne after he went on a famously tough but successful diet, which has left him looking years younger than before.
He didn’t participate in a Lenten fast, however, because “there wasn’t much left to give up by the time we got to Lent”.
With just a month until polling day, Mr Osborne is spending the holiday weekend on the campaign trail.
But he may permit himself a modest, and strictly affordable, pre-election sweetener.
“I’m sure I will be allowed one Easter egg,” he says.