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Mortgage Repayment Assistance

Volume 489: debated on Monday 16 March 2009

10. What steps his Department is taking to help people who have lost their jobs as a result of the recession to meet mortgage repayments. (263323)

From 5 January, we have doubled to £200,000 the size of the mortgage on which support for mortgage interest—SMI—is paid, and we halved to 13 weeks the length of time people need to wait to qualify. While it is too early to have precise figures, our latest estimate is that this should help prevent about 10,000 repossessions per year.

Will my hon. Friend look again at the people who are entitled to claim SMI? It is linked to income-based jobseeker’s allowance, whereas most of my constituents who lose their jobs are on contribution-based JSA and, as a result, are under real pressure and are losing their homes. Will she instead consider that it might be linked to the tax credit system, so that more help can be given more effectively to my constituents who face losing their homes?

My hon. Friend is absolutely right to raise this issue, and we will, of course, evaluate and review the SMI package in due course. It is worth making it clear that people can receive SMI even if they are on contribution-based JSA, if they are single and meet the qualifying criteria for income-based JSA in terms of the level of savings and so on. However, I suspect my hon. Friend refers to situations when somebody is part of a couple, in which case she is right as the remunerative work rule means that it is long held that they cannot access income-based benefits of any kind if their partner is working more than 24 hours per week. It is precisely to help and support this type of family in such circumstances that my right hon. Friend the Minister for Housing will shortly be introducing the mortgage support scheme.

In Wellingborough, there has been a 100 per cent. increase in unemployment in the last year, and one of the practical results that have been reported back to me is that many people are not getting their redundancy money quickly enough, so that they are unable to keep up with their home mortgage payments. Does the Minister think there is some merit in the Department for Work and Pensions taking over responsibility for redundancy payments?

The hon. Gentleman is always keen to quote figures from his constituency, but I do not doubt that the schemes we have introduced will support his constituents as well as people throughout the rest of the country. I am happy to look at what the hon. Gentleman has suggested, but it is also important to say that, by working together through the lending panel with banks and building societies, we are able to establish better codes of practice, so that lenders give more discretion to those having to pay their mortgages to ensure that, unlike in the ’80s and ’90s, people do not end up unnecessarily losing their homes.