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Repossession and Mortgage Arrears

I am glad to have an opportunity to return to a subject on which I have introduced several debates in the last few years, including one six months ago and an Opposition day debate a year ago. The subject is immensely important because, of all the victims of recession and economic crisis, the people who have the greatest difficulty are those who lose not only their job, but their home, with all the consequences that has for family distress, local homelessness and the availability of emergency and social housing. Two things have happened in the last six months that merit a return to the subject. First, the Government have introduced a wide range of measures, many of which we on these Benches, and indeed other hon. Members, called for. Citizens Advice, Shelter and other organisations acknowledged that such measures have had a positive impact. A lot has been done in the form of the pre-action protocol, the income support for mortgage interest scheme, the mortgage protection scheme and the homeowners mortgage support scheme. I propose to review the progress of those schemes. From the outset, I acknowledge that many initiatives have been introduced. However, some have been more successful that others. The mortgage protection scheme has not been particularly successful. I understand that the latest monthly figures on that so far rather embarrassing scheme were due to appear this morning; in fact, I think they were to be published at midnight. If I were a conspiracy theorist, which I am not, I would wonder why they did not appear before this debate. We shall no doubt hear how that scheme is progressing. There is a lot to report, and I hope that the Minister will be able to update us. The other reason for reviewing the matter after a period of months is to take a rain check on what is happening with underlying trends as the schemes affect repossession and its consequences. In the short run, there is some good news in that the Council of Mortgage Lenders has revised downwards its estimate of the number of people who are likely to be repossessed this year from, I think, 75,000 to 65,000. It acknowledges that that is at least partly because of the intervention of Government schemes. There is also a worry that although such schemes are stabilising the position in the very short term, we are storing up even bigger problems for next year and the year after. In periods of recession, many things happen on a time lag; for example, unemployment lags behind the economy in general. Unemployment continues to rise, and the problems of repossession and arrears lag behind unemployment, so we are dealing with something that has a very long fuse. Many people who deal with housing needs are worried that the problem will deteriorate badly next year and the year after. There are several reasons for believing that, one of which is that, even if the economy were to recover in a conventional sense, we would expect interest rates to rise. The fact that we have historically low interest rates—at least at base rate level—is one of things that is alleviating the problem at the moment. That is not something on which we can continue to count. In addition, what seems to be happening through the pre-action protocol and other interventions is that many of the problems are being damned up. Good practice and forbearance by the courts and mortgage lenders are rightly keeping some of the problems at bay, but eventually they will have to be dealt with. There will be a flood of repossessions when the delays are worked through. The Government's schemes are temporary, and there is a concern about what will happen when that period ends. Some interesting and slightly worrying analysis has been conducted by a man called Mr. Shepherdson, who was the former chief economist at HSBC. He believes that, taking all those factors into account, repossessions may well be at more than 100,000 a year by 2011. There is a worrying level of delayed reaction. It is useful to have this debate at this stage because we can flag up that problem in advance and be clear about whether the Government have thought through their emergency actions and what has to happen next.