Payment holiday plan revealed as Brown defends programme
PM pledges mortgage lifeline for crisis Scots
Published:
The prime minister revealed plans last night for partial mortgage “holidays” of up to two years for people laid off and struggling to keep their homes in the worsening economic crisis.
Gordon Brown announced the surprise £1billion lifeline on the eve of a Bank of England announcement that could see the interest rate cut to a record low of 2%.
A deal struck with the country’s eight biggest banks will mean people who lose their jobs or face a severe drop in income will be able to avoid losing the roof over their head by deferring part of their mortgage interest payments.
This would give them breathing space to get their finances back on track.
Amid fears that home repossessions could soar to the levels of the housing crisis of 1991 – when 75,000 families faced being thrown on to the street – the prime minister also announced government-owned lenders Northern Rock and Bradford and Bingley had joined Lloyds TSB in agreeing repossession proceedings would not begin until households were six months behind in payments.
Mr Brown urged other “responsible” banks to follow their lead.
He was defending a Queen’s Speech that made it clear steering Britain through the economic downturn was the top priority in his programme for the next year.
His legislative agenda has been pruned from an original list of 18 bills to just 13, the shortest line-up of new measures for years.
Mr Brown’s announcement was broadly welcomed but concerns remain that, for many, the new measures will simply postpone eviction.
Halifax Bank of Scotland’s head of mortgages, Joe Higgins, said it would provide an additional tool to lessen the risk of repossession and added: “We are committed to working with customers who are experiencing financial difficulty, to help them stay in their own homes.”
Shelter Scotland director Graeme Brown said it was “great news for many thousands of homeowners struggling to keep a roof over their head this Christmas, and the millions more who fear what might happen if they lose their jobs”.
Aberdeen South Labour MP Anne Begg said: “It will at least give people a breathing space and a chance of holding on to their homes until they can find other work.”
SNP Treasury spokesman Stewart Hosie, MP for Dundee East, called for more clarity over the Homeowners Support Scheme, which will be underwritten by a UK Government guarantee.
He said: “Just like the fag packet it was written on, this announcement should probably come with a health warning.”
He wanted to know what proportion of mortgage interest would be deferred and for how long.
Inverness, Nairn, Badenoch and Strathspey Liberal Democrat MP Danny Alexander claimed Labour was “trying to spin this announcement to sound a great deal more extensive than it actually is”.
All 13 bills apply to Scotland to a greater or lesser extent.
A banking bill raises the level of deposits guaranteed by the taxpayer to £50,000.
There are more welfare “reforms”, including making single mothers with children over seven earn their own living.
The package includes a savings plan for those on benefits under which taxpayers would add 50p to every £1 put aside and a measure improving the supply chain for the construction industry.
The list includes a marine bill confirming that Scottish ministers will take charge of planning up to 200 miles off the coast, designate conservation zones and license most activities offshore.
A policing and crime bill will ensure bans on football hooligans in England and Wales are recognised in Scotland, improve security at airports and stop criminals profiting from crime by publishing their memoirs..
Other legislation will strengthen controls on party fundraising, set a legal framework to abolish child poverty by 2020, strengthen co-operation between UK and Scottish ministers on education and training, crack down harder on the gender pay gap and extend to Scotland measures to exchange data on NHS professionals’ pay.
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