![]() ![]() It would also, as the Chancellor correctly highlights, “prolong the inflationary agony”, which is the last thing anyone needs right now. With government borrowing costs already at a 15-year high, another giant rescue package would almost certainly spark a return of the dangerous market chaos of the sort that brought down Truss and Kwasi Kwarteng. It should have been far more tailored towards those who would have otherwise been unable to pay their bills, or were having to choose between heating and eating.īut even if the Treasury wanted to step in again with a mortgage protection fund, as Davey has dubbed it, it probably wouldn’t be able to. Many wanted to give it back or donate it to those that were genuinely struggling. I lost count of how many people of my parents’ generation kept insisting that they didn’t need the money. The energy support scheme was far too broad and another finger in the air exercise from a Cabinet that had run out of ideas. Indeed, that should have happened long ago but instead it chose to ride to the rescue again during the energy crisis. The Government has to draw the line somewhere. Families are now labouring under the heaviest tax burden since the war. Because of the nature of the pandemic it was able to act without worrying too much about how or when the bill for it all would be repaid.Ĭovid support was essentially an open-ended uncosted Treasury guarantee. The Government had no choice but to step in and act quickly to save the economy from total ruin. It was a never-ending supply of freebies and cheap loans, turning us into a nation hooked on handouts.īut what Davey and others seem to have forgotten is that coronavirus was a genuine once-in-a-lifetime event. ![]() The Treasury’s generosity during the pandemic created a world in which families became so used to big financial handouts that many have now come to expect it whenever their finances hit the rocks.įirst it was furlough, then Covid loans and grants, followed by the stamp duty holiday, business rates relief for firms, and finally eat-out-to-help out as panicked ministers threw money at the problem. When Liberal Democrat leader Sir Ed Davey leaps in calling for yet more state support for families, what we are witnessing is a form of Covid PTSD in which people who have forgotten what it is like to stand on their own two feet. Yet Rishi Sunak has sensibly ruled out any bailout. With the Bank of England expected to raise the base rate again on Thursday – its 13th hike since December 2021, and probably not its last before the end of the year – the pain is only going to get worse. A mortgage shock and subsequent house price crash would end any chance of this badly wounded Government being re-elected. The middle classes are heading for ruin and there’s a general election around the corner.įirst-time buyers who bought at the top of the market already face the spectre of negative equity. ![]() There is an entire generation of homeowners that have never experienced anything like it. That’s territory that – while briefly witnessed after Liz Truss’s mini-Budget fiasco – is essentially a decade-and-a-half high. Meanwhile, the average rate for a two-year fixed mortgage tipped over 6pc on Monday. The number of deals for first-time buyers has been cut by more than 40pc over the last year, as the lending squeeze tightens. Every day brings news of greater pain for millions of homeowners as Britain finds itself in the grip of a devastating mortgage crunch. No wonder the Treasury is facing calls to step in and help struggling mortgage holders. ![]()
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