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Question
The UK’s homeowners are under increasing financial stress due to rising mortgage rates, compounded by Conservative decisions. Will the Economic Secretary now apologise for last September's mini-budget and its impact on homeowners and renters? The government is accused of focusing elsewhere.
Minister reply
The hon. Member did not address Labour's plan; he also ignored international factors leading to similar interest rate increases in other countries.
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Question
Why don't banks increase savings rates along with mortgage rates when the Bank of England raises rates?
Minister reply
The independent Governor of the Bank of England is correct, and National Savings and Investments continues to offer attractive products for savers.
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Question
Given changes in mortgage rates due to base rate increases, what discussions have the Government had with the central bank about the effectiveness or appropriateness of an inflation target?
Minister reply
The Chancellor is clear on the Bank's remit and its operational independence beyond that. The government prioritises getting the economy growing, reducing debt, and halving inflation.
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Question
Does the Minister agree that ultra-low interest rates cannot be seen as the sole benchmark of economic success?
Minister reply
A stable fiscal environment and low interest rates are important, but so is a supply-side economy that supports growth.
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Question
Does the Minister acknowledge the additional £1 billion in mortgage payments since the mini-budget and that an estimated £9 billion more will be required due to economic mismanagement?
Minister reply
The government has provided significant support to households during difficult times, highlighting its response to the pandemic and Ukraine.
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Question
Inevitably, the level of Government borrowing itself is a determinant of interest rates, isn’t it?
Minister reply
My right hon. Friend—is right to say that one factor is the level of Government borrowing. This Government have had to borrow unprecedented amounts due to the covid pandemic and the war in Ukraine, and to provide households with support of about £3,300 over this year and last.
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Question
The Minister likes to point out that this is about international factors and covid. However, the Government fail to mention the mini-Budget fiasco caused by the previous Chancellor and the former Prime Minister.
Minister reply
The hon. Lady needs to look at the facts and the numbers. Despite moving in alignment with other international markets—and interest rates have increased over time—interest rates even today for mortgage holders are lower than those reached in October last year.
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Question
We are seeing wholesale energy costs fall but they are not being translated to the consumer. So how long after inflation falls will we see interest rates come down?
Minister reply
My hon. Friend is a diligent champion for his constituents in Bracknell and I am sure it will not be too long before he has good news to talk about on prices that consumers face.
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Emma Hardy
Lab
Kingston upon Hull West and Haltemprice
Question
Interest rates are up and mortgage deals are being pulled left, right and centre. Will the Government please refocus on this mortgage crisis?
Minister reply
I can give the hon. Lady the reassurance that the wellbeing of the nation’s mortgage holders, savers, pensioners and investors is the whole of my focus.
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Question
One of the biggest challenges facing our country is the inability of young people to afford to buy a home because of inflated house prices. Although recent interest rate rises have compounded the problem, is not the real problem that interest rates were far too low for far too long?
Minister reply
I thank my hon. Friend who does a wonderful job of advocacy for her constituents, including those who seek to buy their first home.
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Question
The Government’s economic mismanagement has caused low growth, soaring food bills and record mortgage costs. Millions of hard-working people are being penalised for getting a foot on the housing ladder.
Minister reply
I did not hear fully what the Member for Richmond Park aligned with Mid Bedfordshire was saying, but I am sure that residents in Mid Bedfordshire have welcomed the stability that we have brought to the economy and the fact that we have supported householders through the past two difficult years.
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Question
My hon. Friend is correct to highlight that we are facing international challenges and that monetary policy is the responsibility of the independent Bank of England.
Minister reply
I thank my hon. Friend the Member for wonderful Old Bexley and Sidcup (Mr French) for that.
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Question
The value of mortgage arrears has risen by a troubling 10% in the past quarter.
Minister reply
I talked about the focus on the level of mortgage arrears, which are at an historic level. My Treasury colleagues and I are tracking them extremely closely.
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Question
Does the Minister agree that although the Opposition like to blame the Government for this situation, the real problem lies with covid and the Bank of England?
Minister reply
My hon. Friend speaks wisely and regularly on behalf of his constituents.
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Question
The Resolution Foundation has estimated that around 1.6 million households will see their fixed-rate deals come to a conclusion before the first quarter of 2024 and, therefore, will obviously feel the impact of increased rates.
Minister reply
We all want interest rates to fall as rapidly as possible.
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Question
Does my hon. Friend see any consistency in the Opposition’s analysis that suggests that the primary cause for interest rate rises is unfunded borrowing, while making significant unfunded borrowing pledges themselves?
Minister reply
My hon. Friend is absolutely right: the last thing that the economy needs at the moment is any party coming forward with more unfunded spending cuts.
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Question
When would the Minister say the Tory party gave up being the party of home ownership?
Minister reply
The hon. Lady is, I am afraid, completely incorrect. The Conservative party is absolutely on the side of home ownership.
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Question
Santander is the latest major bank to temporarily pull its mortgage deals for new borrowers, just days after HSBC did the same. Is it not true that this degree of turbulence is abnormal and indicative of significant economic issues, causing anxiety among ordinary people?
Minister reply
I think the hon. Member's contribution is unworthy. I understand the anxiety about mortgages but assure her we are using all tools to support households and making tough decisions to control debt and inflation.
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Question
Due to economic failure, constituents are facing soaring mortgage repayments with banks withdrawing mortgage deals. How can voters trust the Government to address this crisis when it is their fault?
Minister reply
Perhaps constituents have moved for better opportunities, acknowledging our significant support for homebuyers and the tough decisions we make.
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Question
The Minister claims economic issues are international but credits future improvement to the Government. With mortgage borrowers contributing £1 billion in interest rates, why won't he apologise?
Minister reply
While international factors play a role, we focus on controlling variables within our control by avoiding unfunded spending that would raise inflation and interest rates.
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Question
The Minister's support is ineffective against economic crises fuelled by the mini-Budget and Brexit, with mortgage rate rises potentially breaking constituents' backs.
Minister reply
It’s hard to reduce this situation without acknowledging international dimensions like Ukraine war and pandemic. We are making difficult decisions to address these challenges.
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Question
The Minister claims to shield families but refuses an apology. What assessment has the Department made of those affected by recent mortgage rate increases?
Minister reply
Around 1 million to 1.5 million people are affected, a significant number. We engage with lenders and look for solutions within complex individual cases.
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Question
The Government made a profit of £2.4 billion from selling mortgages after 2008, impacting mortgage prisoners. Will the Minister work to find proportionate solutions?
Minister reply
I am open to finding solutions but recognise it is complex with many individual fact patterns. We will continue to engage on this issue.
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Question
1,100,000 people are affected by the mortgage market chaos. How many renters are affected? There is a renting crisis with unaffordable rent increases.
Minister reply
No rental figures available but we monitor closely. The Secretary of State has brought significant reforms for renters and prudent financial management is key.
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Question
Mortgage arrears have risen by 10%, many constituents struggle with mortgage payments, the price paid for economic failures. What conversations has the Minister had with lenders?
Minister reply
Engage frequently with lenders on forbearance for families struggling. Statistics show a record low level of mortgage arrears before the pandemic.
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Question
Mortgage costs are set to increase by more than £1.8 billion in London, people face high interest rates and income strain. When will the Minister understand the crisis's impact?
Minister reply
Household support of £94 billion during the cost of living crisis is provided; while we share concern about mortgage costs.
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Question
Following bank collapses, what assessment has the Treasury undertaken of UK financial institutions' resilience amid rising mortgage costs?
Minister reply
Close liaison with Bank of England and PRA assures us that UK financial system is safe, secure, and soundly capitalised.
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Question
York is a low-wage economy with house prices rising by 23.1%, the highest in the country, last year. With mortgage rates predicted to rise further, what protections will the Minister put in place for constituents who are already struggling?
Minister reply
The Government is working with lenders on forbearance and with the Department for Work and Pensions on mortgage interest support, ensuring families have access to necessary assistance.
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Question
The typical household's mortgage payments have tripled in two years while wages are lower than when the Conservatives came to power 13 years ago. Why should constituents carry on paying for economic mismanagement?
Minister reply
Despite global challenges, the Government has provided £400 billion of support and is focused on reducing inflation, growing the economy, and lowering debt burdens.
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Question
Repossession rates increased by 27% in the first three months of this year. With mortgage payments set to increase by £9 billion over the next two years for millions of customers, does the Minister have reservations about how his Government has managed the economy?
Minister reply
The Government is focused on managing the economy responsibly and not making unfunded spending commitments that would harm mortgage holders.
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Question
Does the Minister realise that his constituents are worried about their mortgages, yet have heard nothing from him to suggest that things will get better?
Minister reply
The Government is focused on responsible management of the economy and not making unfunded spending commitments like those proposed by Labour.
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Question
Given the increase in mortgage arrears, will the Minister consider increasing access to mortgage interest relief?
Minister reply
There are no plans to change this as it is a matter for fiscal events and the Chancellor.
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Question
Does the Minister agree that the cost of borrowing in the UK is higher than in other developed economies, blaming global factors repeatedly, leading to a Tory mortgage penalty?
Minister reply
The Government believes responsible management of the economy will lead to lower costs for homeowners. The best support comes from urging local authorities to build more homes.
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Question
With 1.5 million households facing sharp rises in monthly repayments, what is the impact on those considering buying their first home and are discussions taking place with local banks to support this?
Minister reply
The Government understands the anxiety of mortgage holders and will provide financial support while making good economic decisions to ensure falling interest rates and inflation.