Pre-Budget Report 2008

The chancellor published his 2008 Pre-Budget Report on 24 November 2008. The chancellor's statement, full pre-budget report and accompanying documents are all available on the Treasury's website.

The key points of interest are highlighted below, and our response to the Pre-Budget statement is available here.

Chapter 3: Ensuring financial stability

Restoring stability (p60-62)

  • Lord Turner, chairman of the FSA, was asked by the government to make recommendations for reforming UK and international approaches to regulation to ensure future stability of the UK banking system. The review will be published in March 2009.

Chapter 5: Helping people fairly 

Helping home-owners and first-time buyers (p94-98) 

  • A new lending panel will be set up bringing together lenders, trade bodies, consumer groups, and the government, regulators and the Bank of England. The panel's aim is to monitor and improve lending to businesses and households, drive up best practice across the mortgage market and promote awareness of initiatives to support households against repossession.
  • The announced that the lenders represented on the lending panel have committed to adopt best practice and not initiative possession action for at least three months after a borrower goes into arrears.
  • The recently announced mortgage rescue scheme will be extended to include second charge mortgages.
  • The upper limit on which income support for mortgage interest is paid will be extended to from £100,000 to £200,000 (rather than £175,000 announced in September). The current interest rate at which ISMI is paid will be maintained for the next six months for existing claimants.
  • The government will consult on extending FSA regulation to the sale and rentback market.
  • The Office of Fair Trading will publish guidance early next year to help ensure that second charge lenders only use repossession as a last resort.
  • In addition to funding announced in September, the government will provide a further £775 million of housing and regeneration investment, including £575 million to provide additional support for social rented homes, with £150 million to support delivery of new social housing, £250 million to sustain and accelerate the Decent Homes programme and £175 million on major repairs.
  • The government will continue to work with stakeholders and experts on how it is best to achieve a deeper market in longer-term fixed rate mortgages in the longer term.
  • The government welcomed Sir James Crosby's final report which was published alongside the pre-Budget report. It will now work towards implementing Sir James' recommendation of a government guarantee, for a temporary period, on high quality mortgage-backed bonds. An update will be given at the time of the 2009 Budget.

Helping people manage their finances (p98-100)

  • An additional £5.85 million in funding will be provided to increase the provision of free telephone debt advice.
  • A further £10 million will be provided to fund citizens advice bureaux to expand face-to-face capacity.
  • The government will set up an online destination on Directgov which will provide people with free and impartial sources of advice and support.  Information on financial support, along with debt advice, will be further promoted from January 2009, as part of a campaign to promote Directgov services.
  • The government and FSA are on track to launch the £12 million Money Guidance pathfinder in the north west and north east of England in spring 2009. It will target those who are vulnerable to the consequences of poor financial decisions. The service will be available via the internet, phone and face-to-face and aims to reach between 500,000 and 750,000 people.
  • The government has called for views from industry and individuals on whether creating a new tax-relieved savings scheme targeted at first-time buyers would be a helpful step forward.

Chapter 7: Delivering on environmental goals

Changing behaviour at  home and at work (p139-141)

  • The government will shortly set out its proposals for new zero-carbon homes.

Adapting to climate change and protecting natural resources (p142-143)

  • £20 million of the funding for flood defences and adaptation measures will be brought forward to 2009-10.

 

 

 

 

 

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