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Mortgage Assistance

Volume 487: debated on Monday 2 February 2009

7. How much funding his Department plans to provide in 2008-09 to people with mortgages who have lost their jobs. (253030)

We will provide the funding necessary to meet our commitment that people with mortgages who have been on income-based jobseeker’s allowance for 13 weeks can get help with interest on up to £200,000 of mortgage capital. Updated expenditure projections will, of course, be published in the Budget.

“Lose your job, lose your home” is the great fear that people have at this time. It is important that they should get quality advice when they first approach Jobcentre Plus having lost their jobs. There is a little confusion out there about the type of product on offer. The Government have made positive changes on support for people who have mortgages and lose their jobs. Will the Minister make sure that the advice given by Jobcentre Plus is of the highest quality?

My hon. Friend makes a good point. People who have been in work for a while and are paying mortgage costs may not be aware that the Government can, in some circumstances, take the burden of paying mortgage interest from them. We will be judged on how we respond to the recession that currently faces so many countries. In previous recessions, under previous Governments in this country, people ended up out on their ears and out of their homes due to the large number of repossessions. We are making sure that we are providing support to people where they need it. The first advice is always to talk to the lender, but the Government will now help after 13 weeks.

Two months after the pre-Budget report, why are the Government still unable to set out the costs of their proposed mortgage deferral scheme and to say how many people will take up the scheme? Two months after a Government statement that promised action to help people with mortgage problems, there has been no delivery. When will the delivery take place?

I simply do not understand the hon. Gentleman’s point because, as I just said in answer to my hon. Friend the Member for Telford (David Wright), we will make the funding available to meet the commitments that we have stated clearly in the pre-Budget report. It has been estimated that, as a result of the more generous support for mortgage interest, about 5,000 repossessions will be avoided. Those repossessions might have taken place under the policies of the previous Conservative Government. Obviously, we are working with colleagues at the Department for Communities and Local Government to make sure that the package provided is what people want. Updated expenditure projections are always published in the Budget.

Interest rates are at a record low and home ownership is at record levels. Is it not sound economics to keep everybody in their homes?

As my hon. Friend will know, the Chancellor and the Prime Minister have been working with the Council of Mortgage Lenders to agree a deal to put to people who have mortgages with its banks and building societies. The details will be announced shortly; in fact, some have already been announced in the past few months. As a result of the pressure that we are putting on banks and building societies, the advice that we give people is clear: people should always talk to their lender first. There is flexibility there. After 13 weeks, the Government will help people on income-based jobseeker’s allowance who are having difficulty with their mortgage payments.

Does the Under-Secretary agree that one way of reducing the number of unemployed people who have to seek mortgage help is by her instructing her officials, and the Chancellor instructing his, that bureaucracy in the Government should not impose the firm rules for VAT, PAYE and other taxes? Companies can then survive for longer than normal because they are not pursued by the bureaucracy, which, with its rigid, authoritarian approach, drives companies to the wall and creates greater unemployment.

I do not know whether that point was directed to the hon. Gentleman’s Front Benchers or to ours, but we have already announced that companies can simply ring the Inland Revenue if they need help with rescheduling their payments to the Government. We are providing the flexibility. The problem with the Conservative party is that it will not agree to increase spending at this time to make such flexibilities—[Interruption.]

The help that the Government offer families on income support with their mortgage payments is welcome. However, in many families, one partner may be on short-time working, or one may have lost a job while the other is still in work. Those families are not on income support, but their reduced income means that they struggle hard with their mortgage payments. Can the Government do anything to assist families in those circumstances? Otherwise, we will have a lot of avoidable repossessions.

Absolutely. Obviously, every family is in different circumstances—that is why it is important that the Government can work constructively with the Council of Mortgage Lenders to ensure that banks and building societies give appropriate advice and flexibility to people in all sorts of circumstances. It is not in the interests of the banks and building societies for repossessions to take place.