Mortgage Charter

Debate between Stewart Hosie and Jeremy Hunt

Monday 26th June 2023 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

With a debt to GDP ratio of 100%, the Chancellor was rather brave to talk about sound money. However, I welcome the statement and early sight of it. Notwithstanding the fact that it was described by Reuters as a package of limited relief measures, it is none the less necessary and welcome, with support from lenders, no repossession within 12 months of a missed payment, the chance to lock in a deal six months early, a temporary move to interest-only, and no impact on customer credit scores. The Chancellor’s words about anxiety and concern struck the right tone, unlike his Prime Minister yesterday.

However, that that does not begin to answer some of the fundamental questions. Given that the base rate drives the mortgage rate, and the base rate, as the Chancellor knows, is the primary tool that the Bank has to tackle rising inflation, is this now not the time to review the Bank of England’s targets and tools? Secondly, are the Government genuinely convinced that using a rising base rate to tackle input inflation caused by external shocks is the best approach we have, other than to tip the economy into recession, as some people are suggesting? I hope the Chancellor would agree that that would be an idiotic and catastrophic thing to do. Thirdly and finally, should we now not revert to forward guidance on base rates from the Bank of England, as we had under Mark Carney during the financial crisis? It may not affect the trajectory of interest rates and mortgage rates initially, although it might, but it would certainly provide certainty to business, retail and mortgage borrowers.

[Jeremy Hunt]

I often do not agree with what the right hon. Gentleman says, but I thank him for the constructive tone of his comments this afternoon, because he is absolutely right to talk about external shocks. He will know, as we do, that interest rates have gone up by similar amounts in the United States, Canada, Australia and New Zealand and that core inflation is higher in 14 EU countries. We need to look at all the tools at our disposal. Whether the Bank of England Governor issues forward guidance is a matter for the Governor, but I am sure he will have heard the right hon. Gentleman’s comments. It is important, because we respect and support the independence of the Bank of England, that I allow the Governor to make those judgments. I disagree with the right hon. Gentleman’s suggestion of reviewing the target for inflation. That target is the right target, and it is important that we give everyone confidence of our total commitment to hitting that target, which we will.

Oral Answers to Questions

Debate between Stewart Hosie and Jeremy Hunt

Tuesday 20th June 2023 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

The cost of a two-year fixed mortgage in March 2021 was 2.57%; this week, it reached 6%. The Chancellor and the Economic Secretary have said there are no plans to change the Bank of England inflation target, meaning that the base rate that drives the mortgage rate will continue to rise as inflation stays stubbornly high, and mortgages will go up. In the absence of such a change, what do the Government plan to do to actually tackle the mortgage pain people are suffering?

[Jeremy Hunt]

First, I would say to the right hon. Member that he is talking about something that is being experienced across the world. In fact, interest rates have risen faster in the United States and Canada than they have here. The answer is that we will look at doing everything we can to help people under pressure, but we will not do things that would prolong the inflationary agony that people are going through. We have to be very careful, because a lot of the schemes that are being proposed would actually make inflation worse, not better.

[Stewart Hosie]

On the issue of inflation, the Office for Budget Responsibility said in March that inflation was due to peak at 2.9% at the end of this year. By May, the Bank of England had forecast that it would be 5% at the end of this year, so it had almost doubled in the space of two months. Given that headline inflation is still 8.7% and food inflation is 16.5%, will the Chancellor guarantee today that inflation will be halved to 5%, as promised by the Prime Minister in January of this year?

[Jeremy Hunt]

The IMF, the OBR and the Bank of England all predict that we will hit our target to halve inflation, and I give the right hon. Member this guarantee: we will stick to the plan to do so.

Economic Update

Debate between Stewart Hosie and Jeremy Hunt

Monday 17th October 2022 Commons Chamber

[Jeremy Hunt]

The answer is yes. To demonstrate that I understand what my hon. Friend is talking about when he talks about the private sector, I am going to say some words I have always dreamed of saying from this Dispatch Box: I used to be an entrepreneur.

[Stewart Hosie (Dundee East) (SNP)]

The Chancellor spoke about difficult questions to be faced in the future, and I hope he is not going to fall into the old trap of trying to cut his way to growth, because that cannot work and it never works. May I welcome what he did today: the screeching U-turn on the vast majority of the mini-Budget from the Prime Minister and his predecessor? Given that he has done that—I do welcome it—may we have a guarantee from him today that for as long as he has anything to do with it, there will never be a return to extremist, crank, experimental, think-tank economics?

[Jeremy Hunt]

I am happy to offer that guarantee if the right hon. Gentleman will agree to explicitly reject the extremist, crank, think-tank economics of Scottish independence.