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Mortgage Support

Volume 483: debated on Monday 24 November 2008

5. What support his Department offers in respect of mortgage repayments to people who have lost their jobs. (237966)

As part of income-related benefits, help is available towards the interest on mortgages. We have announced that from January 2009 help will be available for the first £175,000 of the mortgage for new working-age claims and that, as my right hon. Friend the Secretary of State said, the waiting period for new claims will be reduced from 39 to 13 weeks. We are considering the effect that the 1.5 per cent reduction in the Bank of England base rate will have on the standard interest rate, and we will make an announcement in due course.

The loss of a home can have the most traumatic effects on a family, and in the long term can cost us all significantly more in human and financial terms than the cost of saving the mortgage in the first place. Will he do all that he can to ensure that protection from eviction lies at the heart of our Government’s policy?

I will certainly do all that I can on income-related benefits, and I will pass my hon. Friend’s concern on to those in the Government who have already taken significant action on the points that he raises about housing. We will have to wait and see whether anything else is forthcoming when my right hon. Friend the Chancellor makes his statement later on today.

Will the Minister tell the House how many people will be affected by the time limitation he is introducing in January 2009?

At the moment, considerable help is being afforded people. As and when more claims are made between now and 2009—

I do not know, and neither does the hon. Gentleman—[Interruption.] With respect, neither does the hon. Gentleman, for all his pomposity. It is simply a shift from 39 weeks to 13 weeks. Anyone who claims from January onwards will be directly impacted.

I welcome what the Minister has said. Would he agree that the thrust of Government policy has got to be to keep people in their own homes in this difficult period? I welcome what he said about help with mortgage payments being given wherever possible, but does he agree that where it is not possible, we need to keep people in their own homes? If necessary, the Government should take over property and convert mortgages into rents.

I am not sure about my hon. Friend’s last point, but as she rightly implies, the help given is but one small element of what the Government can do to help people protect their homes, and to ensure that they keep them. I agree with her broad point that the Government should work across the piece—much more broadly than the work of the Department for Work and Pensions—to ensure that people’s homes are preserved, especially in a period of economic downturn.

I welcome the Minister’s first answer, even though he seems to have gone slightly downhill since. Can he explain why the system, which has been encouraging people to own homes for the past 11 years, and quite rightly so, still does much more to support those paying rent than those paying a mortgage, even among those with modest incomes in modest houses? I welcome the changes, but why does the system still prefer those in rented accommodation?

I welcome the hon. Gentleman’s comments. I am not sure that he is entirely right about discrimination in the system in favour of tenants rather than home owners. There are, after all, two entirely different prevailing legal circumstances. With regard to income-related benefits, we are trying to do all that we can to provide support to both the home owner, given their circumstances, and the tenant, given theirs. They are not entirely comparable in the way the hon. Gentleman implies.