Management of the Economy and Ministerial Severance Payments

Emma Hardy Excerpts

Tuesday 15th November 2022 Commons Chamber

[Sarah Owen]

Unfortunately, my hon. Friend is absolutely right. As my hon. Friend the Member for Rhondda (Chris Bryant) has said, even an 11-year-old knows that the Tories “broke the money”. While our European neighbours are working with mortgage rates of about 2.2%, a two-year fixed-rate mortgage in the UK is currently 6.3%. What makes the UK so different from other countries to the extent that our mortgage rates are more than double those of France, Germany, Sweden and Norway? The list goes on. What they do not have to contend with, though—unfortunately, we do—is a Tory Government weighing down our country with more than a decade of stagnation and failure, a shockingly ill-judged mini-Budget and the distraction of scandal after scandal.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

When the Treasury Committee looked at mortgages in detail, one thing that was highlighted in the evidence sessions was the impact on the buy-to-let sector, where fewer properties will mean rents become more expensive. Does my hon. Friend agree that the Budget not only managed to harm people who own properties but is having a detrimental effect on the income levels of people who are renting?

[Sarah Owen]

My hon. Friend is absolutely right. What is shocking is that, time and again, we have heard warm words from Ministers at the Dispatch Box, but there has been absolutely no meaningful action for renters. Labour has called on the Government to bring forward urgent legislation to end section 21 eviction notices. Thousands of people across the country are being evicted from their homes through no fault of their own. The Government could act, but they choose not to.

Ministers cannot hide behind the spectre of Putin forever. At some stage, surely, they have to own their own mistakes. Who has to pay for this failure? Is it the people who caused it? It is not the people who crashed the economy, according to the Government. This warped world we live in now means that the former Conservative Prime Minister and former Conservative Chancellors are actually being rewarded for crashing the economy. It beggars belief.

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[Sarah Owen]

My hon. Friend is absolutely right. What is also shocking is that they could not turn up today to say sorry, apologise, and face up and take responsibility for the damage they have done.

There are millions of people in this country who do the right thing. They work their fingers to the bone. They are the ones paying for this Government’s repeated mistakes. They include people like the nurse in the heartbreaking case spoken of by my hon. Friend the Member for Birmingham, Erdington (Mrs Hamilton), and a couple in Peterborough, who told us,

“My husband and I are both teachers. We work full-time and have a joint income of nearly £80,000. We have a deposit sitting and waiting of £35,000. I have only ever rented for the past 18 years. We couldn't afford to buy at the start of our careers. We were recently told we would be snapped up as first-time buyers. But then the crash came. We can't keep adding to our savings, costs are going up and some banks now want a 40% deposit.”

They include people like Jon, who works full time and whose wife is a small business owner. They and their two children live in London and now face a 60% increase in mortgage payments—an extra £600 a month. They include people like Bernadette in Hastings. Her fixed-term mortgage comes to an end in December and the earliest she can renegotiate is this month. She is incredibly worried about what the costs will be. She is a hard-working mum and a Communication Workers Union member who works two jobs, one as a postwoman and one as a small business owner, which she works around her schoolchildren.

As for the hon. Member for Sedgefield (Paul Howell), when he tells us to shut up—no. When people in this country are suffering, when people in this country cannot afford their bills and when people in this country cannot get on the housing ladder—no, I will never shut up, because the Conservatives crashed the economy. We on the Labour Benches will always, and proudly, be on the side of ordinary working people. Perhaps he should go away and learn some manners.

[Emma Hardy]

In a Treasury Committee evidence session, Charles Roe, director of mortgages at UK Finance, said that, when the Prime Minister was the Chancellor, he agreed to get rid of the zero earnings rule for the mortgage interest rate relief system. He signed it off. Does my hon. Friend agree that the Prime Minister should follow through on that promise, so that people who cannot afford their mortgages are able to get the support they need, which they were promised months ago by this Government?

[Sarah Owen]

That perfectly highlights the problem here. We may have had a change at the top, but we have not had a change of the people making the decisions. Ultimately, there was a problem before the mini-Budget. As we have rightly heard from across the House, people were struggling to get on to the housing ladder and that is continuing. So we need to hold the Prime Minister to account for what he promised when he was Chancellor, but we also need to hold him to account for his inaction since.

Citizens Advice Scotland reports a 25% increase in views of the webpage, “What to do if you can’t pay your mortgage”. As my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) said, it is not just customers, but lenders who cannot have certainty or confidence in the Government to make life better. As the shadow Minister, my hon. Friend the Member for Wigan (Lisa Nandy), rightly said, why are Ministers not meeting with lenders in the same way that Labour Front Benchers are?

If hon. Members think that is bad, across all advice webpages relating to mortgage problems, there has been a 277% increase in page views between this year and last. People are desperate. As my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) said, that is not scaremongering. People are terrified because there is no leadership and because of the Government’s failure.

First-time buyers have yet again been the most affected, with home ownership down 26% compared with last year. That is not progress. I am glad that the hon. Member for South Cambridgeshire (Anthony Browne) is back in the Chamber, because I would like to update him. His points, which were either given to him by a researcher or his Whips, were clearly wrong, because the peak home ownership rate was actually 70.9%. Guess when that was? In 2003, under a Labour Government. As my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) said, people should have the right to security and peace of mind in their homes. People would have that under a Labour Government again.

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[Alex Burghart]

The House will be aware that my right hon. Friends the Members for South West Norfolk (Elizabeth Truss) and for Spelthorne (Kwasi Kwarteng) served continuously as Members of Parliament for long periods before taking up the offices of Prime Minister and Chancellor of the Exchequer—in the case of the former Prime Minister, for 10 years, and in the case of the former Chancellor, for four.

Let me be clear. The fact that this is a statutory entitlement does not mean that Ministers are not able to waive such payments. However, that is a matter not for the Government but for the individuals involved. I am not a Treasury Minister; I am a Minister for the Cabinet Office. This is one of the basic facts that the Opposition do not seem to have picked up on when they embarked on the motion.

Let me now address the points raised throughout the debate about mortgages and housing. I recognise the anxiety that people feel about mortgage payments, which obviously constitute one of the biggest bills that many people experience. There are a range of factors affecting mortgage and other interest rates, but this Government will do everything possible, under this Prime Minister and this Chancellor, to get a grip on the problem of inflation and seek to limit the impact that it has on mortgage rates.

The Government are providing unprecedented levels of support to tackle the rising cost of living. From last week, nearly one in four families across the UK will receive a £324 cost of living payment as part of our £1,200 package for the 8 million most vulnerable families. Our energy price guarantee will save a typical household £700 this winter, on top of the £400 through the energy bills discount.

[Emma Hardy]

In an intervention on my hon. Friend the Member for Luton North (Sarah Owen), I referred to evidence given to the Treasury Committee. Joanne Elson, the chief executive officer of the Money Advice Trust, said that the Prime Minister, when he was the Chancellor, had signed off changes regarding access to the mortgage interest rate relief scheme, but the trust was still waiting for them to be implemented. Those changes would mean that people need not have zero income to claim the relief. I recognise that the hon. Gentleman is a Cabinet Office Minister, but I wonder what pressure he could put on his Treasury colleagues to ensure that that promise made a month ago is realised today.

[Alex Burghart]

I am delighted to be able to tell the hon. Lady that on Thursday she will have an opportunity to ask the Chancellor about that issue.

Let me return to the motion, Mr Speaker. [Interruption.] Please forgive me, Madam Deputy Speaker! A thousand apologies. I am so sorry.

The motion claims that mortgage payments rose by £500 a month as a result of the mini-Budget. I think the Opposition will have noticed that on 12 October Full Fact rubbished this claim, pointing out that that figure comes from comparing mortgages available now with those available in August 2020, so it is not a comparison with those available immediately before the mini-Budget. While mortgage rates have risen sharply since the mini-Budget, much of the £500 estimated by Labour is due to rates climbing before it took place.

Once again during this debate we have seen that the Opposition do not have a grasp of the basic facts. Essentially, the facts must not be treated as an afterthought. They are not an afterthought on severance pay, on mortgages or to the international backdrop. The Prime Minister and the Chancellor are apprised of the facts and on Thursday they will bring a statement to this House that will look after the most vulnerable in our society and rebuild our economy.

Question put and agreed to.

Resolved,

That this House censures the former Prime Minister, the right hon. Member for South West Norfolk, and the former Chancellor of the Exchequer, the right hon. Member for Spelthorne, for their mismanagement of the economy while in office, which has resulted in an average increase of £500 per month in mortgage payments for families across the UK; and believes that, if they have not already done so, both right hon. Members should waive at least £6,000 of their ministerial severance payments.