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| Clegg and Alexander reject Cable's warning over Help to Buy | Clegg and Alexander reject Cable's warning over Help to Buy |
| (2 days later) | |
| Nick Clegg and Danny Alexander have dismissed a call by their Liberal Democrat colleague Vince Cable to restrict the second phase of the government's Help to Buy mortgage scheme to areas of the country with depressed property prices. | Nick Clegg and Danny Alexander have dismissed a call by their Liberal Democrat colleague Vince Cable to restrict the second phase of the government's Help to Buy mortgage scheme to areas of the country with depressed property prices. |
| In a sign of tensions over the economic policy at senior levels of the party, Clegg and his close ally Alexander rejected Cable's warnings that Britain was facing a dangerous housing bubble. | In a sign of tensions over the economic policy at senior levels of the party, Clegg and his close ally Alexander rejected Cable's warnings that Britain was facing a dangerous housing bubble. |
| The differences between the most senior Lib Dem members of the cabinet may complicate Clegg's plans to see off calls from the left of the party for a more distinctive Lib Dem approach to the economy. Clegg will take the rare step of summing up the economy debate on Monday at the party conference in Glasgow. | The differences between the most senior Lib Dem members of the cabinet may complicate Clegg's plans to see off calls from the left of the party for a more distinctive Lib Dem approach to the economy. Clegg will take the rare step of summing up the economy debate on Monday at the party conference in Glasgow. |
| The differences emerged after Cable told the Guardian on Saturday that the second stage of the Help to Buy scheme, which will underwrite home purchases worth up to £600,000 with a deposit as low as 5% of the value of the property, should be restricted to parts of the country with depressed property prices. He cited Northern Ireland, parts of the north of England and parts of the Midlands. | The differences emerged after Cable told the Guardian on Saturday that the second stage of the Help to Buy scheme, which will underwrite home purchases worth up to £600,000 with a deposit as low as 5% of the value of the property, should be restricted to parts of the country with depressed property prices. He cited Northern Ireland, parts of the north of England and parts of the Midlands. |
| Clegg dismissed this idea. He said on the Andrew Marr Show on BBC1: "You can't set a national policy, neither the government nor the Bank of England, based only on what happens in Kensington and Chelsea. You have to think about all the other households." | Clegg dismissed this idea. He said on the Andrew Marr Show on BBC1: "You can't set a national policy, neither the government nor the Bank of England, based only on what happens in Kensington and Chelsea. You have to think about all the other households." |
| He said Cable was right to stress the need for vigilance but said Britain was "nowhere near the peak of that unsustainable housing bubble". Mortgage approvals were half of what they were at the peak, Clegg said, and he pointed out that the Bank of England had powers to intervene to curb house prices. | He said Cable was right to stress the need for vigilance but said Britain was "nowhere near the peak of that unsustainable housing bubble". Mortgage approvals were half of what they were at the peak, Clegg said, and he pointed out that the Bank of England had powers to intervene to curb house prices. |
| Clegg defended the second stage of George Osborne's Help to Buy scheme. He said: "We are not talking about encouraging banks to irresponsibly lend at 120% mortgages. We are putting a little bit more air into giving creditworthy customers the ability, not irresponsibly, to borrow money in order to get their feet on the first rung of the property ladder. Clearly in parts of the country, notably central London, the housing market is now marching forward." | Clegg defended the second stage of George Osborne's Help to Buy scheme. He said: "We are not talking about encouraging banks to irresponsibly lend at 120% mortgages. We are putting a little bit more air into giving creditworthy customers the ability, not irresponsibly, to borrow money in order to get their feet on the first rung of the property ladder. Clearly in parts of the country, notably central London, the housing market is now marching forward." |
| Alexander was even more dismissive of Cable's warnings. The chief secretary to the Treasury told Sky News: "We are a million miles away from a housing bubble in this country. Right now the problem we face in the housing market is we are not building enough new homes and there are vast numbers of young people in work who could afford the monthly payments on their mortgage but simply can't afford the deposit they need to get a mortgage. | Alexander was even more dismissive of Cable's warnings. The chief secretary to the Treasury told Sky News: "We are a million miles away from a housing bubble in this country. Right now the problem we face in the housing market is we are not building enough new homes and there are vast numbers of young people in work who could afford the monthly payments on their mortgage but simply can't afford the deposit they need to get a mortgage. |
| "The whole point of the second phase of the Help to Buy scheme is to help those people fulfil their aspirations and in doing so ensure there is more construction activity, that there are more new homes being built." | "The whole point of the second phase of the Help to Buy scheme is to help those people fulfil their aspirations and in doing so ensure there is more construction activity, that there are more new homes being built." |
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