(West
Dunbartonshire) (SNP)
I beg to move,
That leave be given to bring in a Bill to make provision for the
purpose of enabling certain mortgage borrowers to switch to a new
mortgage arrangement; and for connected purposes.
Let me take this opportunity to thank the UK Mortgage Prisoners
campaign group, which has assisted me in bringing this Bill to
the Floor of the House—specifically, Rachel Neale and Jill Hulme,
who are in the Special Gallery. I am very grateful to them and to
their team.
An estimated 200,000 people across the UK, including 40,000
Scots, are deemed to be mortgage prisoners, thought to be at risk
of losing their homes. Many have been stuck on high street rates
since the financial crisis of 2008, and have been unable to
switch due to toughened borrowing criteria. In January, during a
session of Prime Minister’s questions, the Prime Minister assured
me that the UK Government are aware of the difficult situation
facing mortgage prisoners and would be taking action, yet last
week the Chancellor failed to introduce measures to tackle the
issue. It is scandalous that, yet again, the spring Budget has
ignored the plight of tens of thousands of individuals and
families unfairly trapped on crippling mortgage rates.
As the UK Government sit on their hands, having made billions
from the sale of closed mortgage books, mortgage prisoners face
losing their homes through no fault of their own. One has to beg
the question of this unfettered capitalism: how many people have
been made homeless since the financial crash, and indeed how many
have lost their lives?
The Bill that I am introducing to Parliament today aims to
finally end the unfair 16-year financial injustice and address
the failures of successive Conservative and Labour Governments.
Let us not forget that for well over a decade the UK Government
were the ultimate holders of the mortgages through UK Asset
Resolution. I can imagine thinking that no Government would do
anything deliberately to harm the hundreds of thousands of UK
residents in that position, and that a sensible resolution would
eventually be found. Sadly, it was not a purgatory before things
got better. Indeed, they were to get worse.
In 2019, UKAR sold a tranche of books, including some of my
constituents’ mortgages, to a company called Heliodor Mortgages,
which I have mentioned previously. My constituents had never
heard of it, and with good reason: it is not an entity that I or
anyone else in this House could borrow from. It is a vehicle that
exists to service the existing Northern Rock mortgages. Although
Heliodor does operate in a regulated market, its ultimate owner,
Topaz Finance, is not a regulated entity and relies on
third-party administrators who are regulated by the Financial
Conduct Authority in order to comply with its regulations.
Significantly, as a London School of Economics report by Kath
Scanlon et al. points out, the setting of standard variable rate
mortgages is not a regulated activity, meaning that a business
opportunity for morally ambivalent vulture funds such as Topaz
has been created, and people—our constituents—are offered up as
hosts for parasites.
Despite never having fallen behind on their payments, our
constituents find themselves subject to a host of fees and other
spurious admin charges. Incredibly, the amount that some of my
constituents owed rose by almost £10,000 in a couple of years,
with no additional lending offered. They were pushed into
negative equity as the amount they owed Heliodor became greater
than the value of their property.
The cruellest part of this sorry tale of modern Britain is this:
one of my constituents is approaching the end of the 25-year term
of their mortgage, but as they were forced into the interest-only
plan, just a few short years after they began to make repayments,
they now risk losing the family home of a quarter of a century
unless they can come up with the full amount owed to
Heliodor.
The aspect I find most galling is the inversion of the principle
of home ownership, whereby people have ended up paying what is
essentially rent to a vulture fund, which almost certainly knows
it will be able to acquire the property at the end of the term.
Topaz Finance will have been licking its lips, I am sure, at a
deal that basically guarantees that it will be paid twice: first,
through the monthly payments that my constituents have been
making; and secondly, when it sells their home from under them in
2029 at a healthy profit over what it picked the property up for
in 2019.
The long tail of the era of neoliberal economics is still
pernicious, because there is a confusion between concepts such as
taxpayer value and what any of us would think they actually mean.
To people like me, taxpayer value is not found in pauperising
hundreds of thousands of households, nor is it to be found in
scraping back every single penny that taxpayers saw spent on
ensuring that the economy did not collapse overnight. To this
old-fashioned social democrat, government is not a bank, with
shareholders that need to see the principal of its loans paid
back in full; it is an institution that is able to intervene in
the economy at strategic moments. That is an idea that I think is
slowly coming back into fashion, but I wonder how many of our
national assets have found their way into the paws of that type
of offshore capital in the intervening 40 years, leaving
taxpayers with all of the costs, none of the benefits, and
absolutely hee-haw value. That is why this Bill is essential: not
only to hold this Government to account, but to shine a light on
the fiscal approach of the loyal Opposition.
The Bill seeks to end evictions for mortgage prisoners. Let us do
what we can to lift the burden that they have carried over the
years. I know from reading briefings that the Government are
concerned about what they call the moral hazard of acting. If
these people have not already had their houses repossessed by
2024, they must necessarily have kept up with their repayments,
so there is a strong case for saying that the moral hazard lies
in the other direction—companies have been deliberately stringing
our constituents along.
It is surely also natural to put a cap on the SVRs being offered
to mortgage prisoners, especially given the general climate of
mortgage instability. Our constituents have been coping with high
interest rates for over a decade, and we gain nothing from
pushing them further into debt. Of course, there will be a cost
to the taxpayer in the abstract, but this move will be an
investment that pays itself back through the cascade of money
into our local economies, instead of into the pockets of offshore
vulture funds. I am afraid that the day of balance-sheet
economics needs to end.
Finally, the Government owe it to mortgage prisoners to find a
way for them to help themselves out of this mess. They should
look into providing a vehicle that allows our constituents who
are mortgage prisoners to pivot back into the mainstream market.
The first suggestion of the report published by the LSE is that
there should be free, comprehensive financial advice for all
victims—that is what they are. Almost 200,000 people who are
victims should be contacted individually to help them navigate
their way out of the quagmire that they find themselves in. As I
said, it gives me no pleasure to conclude that it appears there
is nothing we can do to make up for what UK Mortgage Prisoners
calls the
“extortionate interest rates, severe financial restrictions and
mobility and mental & physical issues caused by this
Government-made scandal.”
However, that does not mean that we should not try.
Question put and agreed to.
Ordered,
That , , , , , , , , , and present the Bill.
accordingly
presented the Bill.
Bill read the First time; to be read a Second time on Friday 14
June, and to be printed (Bill 175).
