Management of the Economy and Ministerial Severance Payments

Alex Cunningham Excerpts

Tuesday 15th November 2022 Commons Chamber

[Lisa Nandy]

The hon. Gentleman can shake his head, but it is a fact. This is money that many families across the country simply do not have. Food is going up, energy is going up, rents are going up and now mortgages are going through the roof. The one thing that this country cannot afford anymore is more of this Tory Government, who have been in office for 12 years.

Almost 2 million people are struggling to afford their mortgage costs. Government Members do not have to take my word for it—that is according to the Office for National Statistics. That is one in four mortgage holders. First-time buyers now face putting £1 of every £4 they earn towards their mortgage. Mortgage repossessions have soared by 91% compared with the same period last year, while the number of orders to seize property is up over 100%.

The crisis does not just affect homeowners; it is seeping into every part of the housing market. Buy-to-let landlords’ profits have declined by almost three quarters compared with last year because of rising interest rates, which means many tenants, already forking out huge chunks of their income on rent, are seeing their rents go through the roof. This is a housing crisis, the likes of which we have not seen for a generation, and what caused it? Let us make no mistake that this is a Tory crisis created in Downing Street by a disastrous mini-Budget which crashed the economy and threw families up and down the country under a bus. It is no coincidence that, after the mini-Budget, more than 40% of available mortgages were withdrawn from the market. It is no coincidence that the Bank of England had to launch an unprecedented intervention to stabilise the markets. Hon. Members do not need to take my word for it; 12 days ago, the Bank of England’s Monetary Policy Committee report said:

“The sharp pickup in UK interest rates has been partly driven by global factors, but UK-specific factors have played an important role”—

and that

“UK interest rates had increased by somewhat more than others”.

[Alex Cunningham (Stockton North) (Lab)]

I congratulate my hon. Friend on her very good speech. I have been pleased to see lots of new homes being built in my constituency and nearby, because that has created jobs. However, does she share my anxiety that, with increased mortgage costs, the new homes will not be sold and that the people who will build the next phase will lose their jobs as well?

[Lisa Nandy]

My hon. Friend is absolutely right, and I will say more about that in a moment. This country is facing not just a housing crisis, but a growth crisis. Housing is a central part of the answer to the growth problem that the Tory Government have presided over for the past 12 years and it has to be part of the solution. This is a Tory crisis; it was made in Downing Street and is being paid for by working people. It is not Tory Ministers who will pay the price for it, but working people who will do so for years to come.

--- Later in debate ---

[Lisa Nandy]

My hon. Friend is absolutely right. The truth is that before the former Prime Minister and Chancellor crashed the economy, we had a housing crisis in this country. We saw social housing stock being lost faster than it was being built, with rents rising in the private rented sector and a real squeeze on people there. The Government promised to do something about it, but we have had three years of them dragging their feet. We have had more Secretaries of State than we have had promises, and we have had a lot of those, but nothing has been delivered. I will say more about that in a moment.

Given all of that, I genuinely ask Government Members: where is the Housing Secretary? Why has he not met banks and lenders in the middle of this mortgage crisis? Any Government worth their salt would be moving heaven and earth to help families and protect vulnerable people as we head into what promises to be the harshest winter that many families can remember. The crisis is of such magnitude that we accept that there is no magic-bullet solution, but any Government worth their salt would do everything in their power and pull every lever to make a difference.

This afternoon, the shadow Chancellor—my hon. Friend the Member for Leeds West (Rachel Reeves)—and I will be talking to lenders about what can be done. Why is the Housing Secretary not doing the same? He has a reputation for roving across Government as Mr Fix-It. This is a major crisis in his brief; why is he not doing everything he can to fix it?

[Alex Cunningham]

I am grateful to my hon. Friend for giving way a second time. I remember the mortgage rates during the Thatcher years: mine exceeded 15%. Despite a good income, we struggled, but all around us, people were losing their homes. Interest rates have some way to go to reach those levels, but does she share my anxiety that if the Government do not take the right action now, another generation will face double-digit interest rates in this country?

[Lisa Nandy]

I agree absolutely. Bringing stability back to the economy is the first step, but the Government could do more. We know that the only way out of this crisis is growth and we know how central housing is to that part of the puzzle. The Government could start by committing again to their target of 300,000 homes a year and do more than that by actually building them. The Conservative Government’s failure over 12 years to build enough homes is a major cause of the housing crisis.

--- Later in debate ---

[Lucy Frazer]

I will give way shortly.

Furthermore, there is some protection in the courts through the pre-action protocol, which makes it clear that repossession must always be the last resort for lenders. Fourthly, if mortgage holders do fall into financial difficulty, guidance from the Financial Conduct Authority requires firms to provide support through tailored forbearance options, which could include a range of measures depending on individual circumstances. We continue to work with the FCA and the financial services sector to explore what additional measures may support efforts to help people facing rising mortgage costs.

[Alex Cunningham]

I am surprised by the Minister’s rewriting of history, particularly in relation to the Prime Minister’s role in failing our economy over many years. She has talked about fiscal rules. Can she tell me why many of the fiscal tables show Britain at the bottom end of the economic league?

[Lucy Frazer]

I think the hon. Member is forgetting that the UK is projected to have the highest growth rate in the G7 in 2023. I think he is forgetting—or is not aware—that we are seeing inflation across the globe. Germany’s inflation rate is 11.6%, Italy’s is 12.8%, and the eurozone’s is 10.7%. These are obviously issues that are affecting people across the globe. This Government are committed to supporting vulnerable people who need the support that we are providing.

Let me now address some of the points made by the hon. Member for Wigan about homes, home ownership and the shattering of dreams. It will not surprise Opposition Members to learn that we believe home ownership to be an essential component of any long-term issues in our economy. This Government are proud of their track record of helping first-time buyers on to the housing ladder, and we have just expanded first-time buyer relief by raising the level at which first-time buyers start paying stamp duty, from £300,000 to £425,000. I seem to remember that the Opposition voted against that. As the hon. Member mentioned, we are also investing £11.5 billion in affordable homes. She will be aware, I hope, that since 2010 we have delivered 598,000 new affordable homes, and Government-backed schemes have helped more than 800,000 households to purchase a home since 2010.