We are concerned to ensure that all lenders do more to help people to stay in their homes at this difficult time. In addition, as part of the recapitalisation arrangements, HBOS, Lloyds TSB and the Royal Bank of Scotland have agreed to put additional funding into shared equity and shared ownership schemes to help borrowers who are in difficulties with repayments.
Does the Chief Secretary not share my concern for constituents who see Members of Parliament as their only option to intercede with the courts to stop repossessions while they get their finances in order, because the banks have not allowed them time to do so? She may say what she likes about encouraging banks to change their policies, but how is she going to deliver?
The hon. Gentleman mentioned the courts, and we have introduced new court rules and procedures that will make clear for the courts, and lenders, the sort of things that they will be expected to do before taking a repossession case, which the court will then ask them serious questions about. Those procedures were introduced during the past week, and will be an important part of ensuring that all lenders follow what is already best practice among some lenders in some cases. We are concerned about cases where that does not happen, and mortgagee repossessions should be a last resort in all cases. We do not want a return to the early 1990s, when the hon. Gentleman’s party was in power and 140,000 families lost their homes in the space of two years.
Does my right hon. Friend agree that the current crisis stems from the fact that there is no trust or confidence between banks? They are not lending money to each other, so the wholesale markets have collapsed. The main reason for that is their exposure to substantial debt. As well as recapitalising the banks and underwriting their lending, is it not about time we insisted that they declare their exposure to the debt, draw a line under the matter, and move on?
My hon. Friend is right in that a range of issues have led to the collapse in trust and confidence between banks, and what started with dodgy lending in the United States sub-prime mortgage market has infected financial institutions throughout the world because of the way in which they were lending to each other—bundling up assets—and they have now lost trust with regard to where those problem debts lie. We have urged much greater transparency, not just here but across the world. This is a global issue, and a global lack of trust has developed in the financial markets. It is important that we have a global approach to transparency, as well as to recapitalisation.
Last week the Chief Secretary said that she wanted repossessions to be a lot rarer. Yet despite reassurances last year about the quality of its mortgages, Northern Rock is repossessing more homes than any other lender. Is she saying that the reassurances she gave were wrong, or are her demands just hot air?
If the hon. Gentleman had been listening earlier, he would have heard me say that Northern Rock has agreed to meet charities that have raised concerns about its position. It also has issues with some lenders who have taken out Together mortgages, which people are aware of; those are mortgages of more than 100 per cent.
However, this is not simply a matter of Northern Rock. It is about every lender recognising its responsibilities to do the right thing by its borrowers and to look for alternatives. That might mean repayment holidays or looking for different mortgage rescue schemes, which is why this Government have introduced extra investment for mortgage rescue schemes, new rules for the courts to follow and increased support for mortgage interest for people who lose their jobs. That is the right thing to do, and I point out to the hon. Gentleman that on the day we announced the extra support for mortgage rescue schemes, his party was advocating increased tax cuts for millionaires’ estates. That is the wrong priority at a time like this.