The Standard View: There are bad ideas, and then there is mortgage relief amid soaring inflation
n politics there are bad ideas, then there are really terrible ideas and, finally, there are mortgage relief schemes at a time of soaring inflation. Such a policy would, as Chancellor Jeremy Hunt himself has admitted, make the current situation “worse, not better”. And yet, opportunists can sense their moment.
It is true, the Government intervened decisively — and rightly — during the pandemic, going as far as paying 80 per cent of people’s wages through the furlough scheme. Then, as gas prices soared following Russia’s invasion of Ukraine, ministers stepped in again, subsiding energy bills. However, a repeat on mortgages would be quite different.
First, the bean-counting defence. The price tag for such a policy would come in the billions of pounds and it would overwhelmingly benefit higher incomes households — three-quarters would go to the richest 40 per cent, according to the Resolution Foundation think-tank.
Second, and more to the point, support would wholly undermine the rationale behind interest rate rises. That is, to cool down the economy to bring inflation back to the two per cent target. The response from the Bank of England would likely be even higher rates. Meanwhile, renters may credibly ask ‘Where is the support for us?’.
A house price correction, should one take place, will be painful for borrowers — though more than half of homeowners don’t have a mortgage. Yet it is not all downside. In concert with lower future interest rates, it should help more people get on the housing ladder, perhaps even leading to a more sensible view of what a home actually is — a place to build a life, not just a nest egg for the lucky.
Tories’ mayoral woes
The race to be the Conservative candidate for Mayor has not exactly taken the capital by storm. But that may change following Susan Hall’s comments today, in which the Tory hopeful became the first to break rank and condemn Shaun Bailey’s “jingle and mingle” lockdown-busting party, saying it “should never have happened”. Fellow candidate Moz Hossain’s campaign is being staffed by several of those caught on the video from December 2020.
This intervention will certainly give Hall publicity, but others will question her judgment. The challenge now is whether she will use this moment to put forward her positive pitch for the city, not only to local party members, but for all Londoners.
Our Windrush tribute
‘WELCOME HOME!’ read the Evening Standard headline on June 22, 1948, as it marked the arrival of the first 800 passengers on the HMT Empire Windrush.
Then last night, 75 years on, in a glorious and moving tribute, ES Magazine took over the lights at Piccadilly Circus with many Windrush elders in attendance. The event was in collaboration with Circa and The Black Culture Archive. It remains our privilege to serve all of London, as we have done since 1827.