Mortgage and Rental Costs
Debate between Alex Cunningham and Nigel Evans(1 year, 5 months ago)
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Alex Cunningham (Stockton North) (Lab)
I well remember 1979, when mortgage interest rates soared under Thatcher’s Tory Government as the Bank of England base rate hit 17%. Those who were buying homes at the time knew all about it. My wife Evaline and I, both in relatively well-paid professional jobs, had moved home a couple of years before and, like many others, had maximised our mortgage to secure the house we wanted for our growing family. Little did we know that the cost of our mortgage would almost double in a couple of years.
My elder son John says he remembers Evaline and I regularly sitting at the table to go through our finances, often robbing Peter to pay Paul, while realising that Peter would still have to be paid with plenty of interest on top. Yes, the anxiety goes well beyond mortgage holders; it affects the whole family. Like many homeowners today, we contemplated selling up and moving to a smaller home, but the reality was that we would not only have lost our new home; we would not have been any better off.
I have huge sympathy for people today who are seeing their mortgage costs go through the roof, largely because the Tories crashed our economy by making some extremely daft decisions when our economy was still trying to cope with the double whammy of Russia’s illegal war against Ukraine and our exit from the European Union. We had it tough when our costs doubled, but today’s Tory mortgage bombshell is so much worse.
Moneyfacts data suggests that the typical rate of a two-year fixed-rate mortgage has increased to almost 6%, almost double the rate of a year ago, and the Resolution Foundation estimates that 6.5 million households will be affected by the post-mini-Budget rise in mortgage rates by 2026. Other huge consequences emanate from the Government’s decisions. This week, economists warned that there is a real risk of job losses and potential recession. The latest forecast for economic growth suggests that the UK is struggling to get out of the slow lane, with growth of just 0.2% forecast for the year.
On Sunday, I watched the Prime Minister ducking and diving under quite simple questioning from the BBC’s Laura Kuenssberg, and it sickened me that he had the nerve and the gall to tell mortgage holders to hold their nerve. He lives just down the road from me, and I wonder if he would like to sit down with a few of my constituents whose fixed-rate deals are coming to an end within the next few weeks. One of them faces an increase from just short of £800 a month to £2,600 a month. I would like the Prime Minister to outline how that constituent should hold their nerve and retain their home.
That same constituent, like everyone else, is not only seeing their mortgage go through the roof. They must also cope with a near 20% increase in food prices, which according to the Office for National Statistics is the greatest hike in 45 years. That can be added to the extra burden of council tax increases across the country, as local authorities collect the Government’s social care levy because the Tories have so drastically underfunded social care in recent years.
What are the numbers on Teesside? In Stockton North, 8,900 families face an increase of £1,400 this year. The pain is the same across the Tees valley, with 11,900 families in Stockton South paying £1,800 more, 9,000 families in Darlington paying £1,400 more, 7,200 families in Middlesbrough paying £1,200 more, 9,300 families in Middlesbrough South and East Cleveland paying £1,700 more, and 8,000 families in Redcar paying £1,500 more.
The Tory mortgage crisis has other wide-ranging impacts. The Government’s failure to build sufficient homes over the last decade has led to limited supply and forced prices up, making it more difficult for people to get on the housing ladder. We also see developers putting some projects on hold and scaling others back. The Government’s housing figures, published today, show that affordable housing providers have stalled or stopped schemes, as they are experiencing what they say is a “perfect storm” of build cost inflation, rising labour costs, material unavailability, building remediation issues and a duty to support tenants through the cost of living crisis. Developers cutting the number of homes they are building will have an inevitable impact on jobs not only in the building sector but across the supply chains that support it.
We could go on forever about the excess profits being made by the banks, as they cash in on higher interest rates, but that appears to be fine by the Government. Now that times are good again for the banks, they need to do so much more. They should concentrate on helping their customers instead of their share price and their bottom line. I wish I could be confident that they will all act, but I am not. It is down to the Government to take action to compel them to do so.
Points of Order
Debate between Alex Cunningham and Nigel Evans
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Lady for giving me advance notice of her point of order. I have had no indication of any such statement, but the Government Front Bench will have heard her comments. Of course, comments made outside the House are not a matter for the Chair. She is free to pursue this matter through other means, and I am sure she will.
Alex Cunningham (Stockton North) (Lab)
On a point of order, Mr Deputy Speaker. I am sure you will be aware of the tragedy off the Teesside, County Durham and North Yorkshire coast, where crustaceans and other wildlife have been decimated and have washed up on our beaches. More dead creatures have washed up today and, according to the Government, there is no definitive cause of this devastation, which is effectively killing our sea and polluting our beaches.
Last week, the Select Committee on Environment, Food and Rural Affairs took evidence from both the Government and eminent university scientists. The Department for Environment, Food and Rural Affairs says it may have been an algae bloom, whereas the scientists believe it to be pollution, likely linked to the dredging of the River Tees. Given this, Mr Deputy Speaker, are you aware of a planned statement from DEFRA Ministers? If not, can you guide me as to how I may secure one?
Mr Deputy Speaker
I am grateful to the hon. Gentleman for advance notice of his point of order. I can confirm that I have had no notice of a statement being made tonight. If that changes, Members will be notified in the usual manner. Ministers, again, will have heard his point of order, and I am sure he will pursue the matter. The Clerks in the Table Office are available to offer advice on how he might do so.
Points of Order
Debate between Alex Cunningham and Nigel Evans
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Member for his point of order and for giving the Chair notice of it. Those on the Treasury Bench will have heard the point that he has just made. Indeed, the Speaker has stressed how important it is that all Departments answer questions that have been given to them as quickly as is possible. I hope they take this opportunity to do so, particularly over the next couple of days, but clearly, if he does not get a response, he still has, as does every other Member here, the opportunity to write to the Departments and the Secretaries of State, even during recess.
Alex Cunningham (Stockton North) (Lab)
On a point of order, Mr Deputy Speaker. Ofgem, the energy regulator, has this week confirmed that it will not introduce a short-haul tariff for gas transportation in October, when the pricing regime comes into play. That will have a huge impact on energy intensive industries on Teesside and across the country that are based near gas terminals. The extra costs could even threaten the very existence of some of those companies.
I know that Ministers have been in touch with Ofgem, but can you tell me, Mr Deputy Speaker, whether you have had any indication at all that a Minister from the Department for Business, Energy and Industrial Strategy is planning to come to the House to make a statement on the impact of this decision and how Government might be able to help?
Mr Deputy Speaker
I thank the hon. Member for his courtesy in giving me notice of the point of order he has just made. He has made an important point, but I have had no indication that a Minister intends to make a statement. Should that alter, it will be communicated to him and the House in the usual way.