Written question asked by Lord Stoddart of Swindon (Independent Labour), in the House of Lords. It was answered by Baroness Andrews (Labour) on Wednesday, 20 May 2009.

Housing: Mortgage Support Scheme

Question: To ask Her Majesty's Government further to the answer by Baroness Andrews on 30 April (Official Report, House of Lords, col. 66), why a scheme designed to assist individual homeowners to avoid repossession of their houses is considered to have the potential to distort competition when it was open to all mortgage lenders to participate in it.

Answer: Under the homeowners mortgage support scheme, the Government give a guarantee to lenders which would allow them to recover some of the interest payments that they would otherwise have to write off. This could be considered to give an economic advantage to lenders entering the scheme and strengthen the position of these lenders compared to that of competitors in other member states. The Government therefore notified the European Commission of the proposed state aid. The Commission approved the aid on 20 April 2009.

Secondary information

Type: Written question
Reference: 3602; 710 c325WA
Session: 2008-09
Related items: Housing
Thursday, 30 April 2009
Written questions
House of Lords
Subjects: Competition Financial institutions Government assistance Mortgages European Commission
Link: View this Written question on www.publications.parliament.uk