---

Repossession and Mortgage Arrears

The hon. Gentleman is quite right. An Office of Fair Trading review of payment protection insurance established that there was substantial overcharging in many cases, and poor consumer protection arrangements. The fact that people did not take out such policies is understandable. If we in this country continue our preoccupation of ensuring that as many people as possible are owner-occupiers, perhaps we should try to ensure that in future mortgage borrowers are insured through a market mechanism of some kind. I was going to mention that later, but perhaps this is a suitable point at which to do so. Some interesting proposals are flying around. One is based on the Canadian model of pooled insurance—pooled guarantees—and another, called the home sale guarantee scheme, is being seriously considered. I hope that the Government are taking that matter seriously. The underlying philosophy of all those proposals is that an element of guarantee and insurance has to be involved in mortgages. The existing payment protection insurance schemes are not working, as the hon. Member for North-West Leicestershire rightly says. In conclusion, I shall move on from the four schemes that the Government have introduced and look a little bit further forward and discuss how the underlying problems will be addressed. Repossession is only really a problem because of the underlying lack of available housing, particularly social housing. If social housing was freely available, repossession would not be the tragedy and disaster it currently is. Are the Government, working with the charitable bodies, doing any research at the moment on what happens to people who become repossessed? I do not think that any of us know where those people actually go, although anecdotal evidence suggests that most of them go into the private rented sector, which of course presents problems of its own. Many people go into the private rented sector because they can then get housing benefit, which they found more difficult to get as owner-occupiers, but many of them are still in considerable difficulty. There is still an issue about how to ensure greater availability of affordable housing in the long term. Yesterday, the Prime Minister, in his statement, gave an indication that more money will be brought forward, stitched together from various other departmental budgets, to increase the availability of social housing. That is welcome, as far as it goes. I understand that the Housing Minister is due to make a statement this week indicating that councils will have greater flexibility in their housing revenue accounts, to enable them to build more council houses of a traditional kind. Will the Minister confirm that that is correct? Will we have a statement about it and will the Government move on the issue? Another development is taking place on which it would be useful to hear the Minister's thoughts. I understand that the biggest leap forward in the housing supply is now likely to happen in the form of institutional private investors—pension funds and insurance funds—putting their money into private rented accommodation, some of which could then be managed by local authorities or other registered social landlords, with a share of property being available for social renting, much as we have had through owner-occupier developments in the past. Do the Government welcome that trend? Are they looking at the role that social landlords can play in collaborative arrangements with private developers producing private rented property? Have they thought through some of the legal implications? Is it part of Government long-term planning? My concluding thought is that the Government have introduced some useful initiatives. They have undoubtedly alleviated the threat of repossession for probably thousands of people, but in many cases the problems are being postponed. We are building up a crisis that will probably reach maturity in a year or two. I want to use this debate primarily to persuade the Government to think ahead rather than looking back, and to consider how to deal with the problem when the crisis builds up in magnitude, as it surely will.