HC Deb 23 July 1986 vol 102 cc284-5W
Mr. Irving

asked the Secretary of State for Social Services (1) what is the estimated impact of the Government proposals to limit the proportion of mortgage interest to be met during the initial period of benefit on the living standards of those affected;

(2) what has been the response of the building societies to the Government's proposals to limit the proportion of mortgage interest to be met during the initial period of benefit;

(3) what impact the proposals for individuals to pay a proportion of rates and mortgage interest is expected to have on the level of repossessions; and what is the estimated cost to the social security budget of possible increased bed and breakfast accommodation.

Mr. Newton

The proposals concerning supplementary benefit for mortgage interest during the first six months on benefit have been referred to the Social Security Advisory Committee for consultation. Final decisions will be taken in the light of the Committee's report, which we have not yet received. We would not however expect proposals along the lines referred to have a significant impact on standards of living of those affected, on the level of repossessions or on the use of bed and breakfast accommodation. Claimants over age 60 would not be affected; in other cases, half the interest would continue to be paid during a period of up to six months on benefit, and anyone whose claim lasted more than six months would receive full help with interest payments after that period, as well as extra payments for any additional interest on a higher outstanding amount due to the limitation. It is estimated that the proposed change would add about £200 to the outstanding loan in the average case where a claim lasted for the full six months. Many claims do not, however, last this long

While the Building Societies Association has made it clear that it does not support the proposals, it indicated in its response to the social security Green Paper that it would respond to any changes sympathetically and continue to help as many people as possible into owning their own homes. I understand that the association has responded to the SSAC's invitation to comment on the proposals, and the committee will no doubt take account of its views in preparing its report.