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Welfare Reform Bill

I think that this is the same case where I spent time with the family, so I am reasonably familiar with it. There was never any preferential treatment within HOLD; it used the standard rates. What has happened is to some extent a bit of a breakdown in the financing market in this area, among other breakdowns, after the worst financial crisis that any of us has ever seen. So we are looking at a dysfunctional mortgage market with huge deposits required. There was never any special provision here: they were using the standard provision. We pulled it down from a little over 6 per cent to, as the noble Lord correctly said, 3.63 per cent and, if we had used the formula pre-crisis, we would have gone down to a rate of 2.08 per cent, which would have left people in an even worse position. To some extent, by moving the way that we do this, we have been more generous than the previous formula, but we have not changed the goalposts in any way. The issue is whether the market revives naturally—I know that it is shut at the moment—or whether, frankly, we need to think again about what is the appropriate level of support and how it should be delivered.