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The Prosser Perspective.... a weekly column from Dover and Deal MP Gwyn Prosser

4 September 2008

The global credit crunch and rising prices are creating a genuine and understandable anxiety for people everywhere and not least in my own constituency of Dover and Deal.

That’s why the focus of the Government must be on taking all necessary measures to guide Britain through this period of global turbulence and helping hard-pressed families who face higher fuel bills and food prices.

Our role when facing global economic challenges is to be on the side of the people most affected and to fight for fairness for the elderly and for hard working families.

That’s why we are raising the Winter Fuel Payments for 12 million people and providing help for low income households with their fuel bills. We are freezing petrol duty for the full year and our £2.7 billion tax cut, announced before the summer, will give 22 million people a £120 boost over the next few months and help us get through the downturn in a fair way.

But we need to help with housing as well. Following a sustained period of rising property prices and strong demand, the UK housing market is currently going through a sharp adjustment, triggered largely by the global credit crisis. People are finding it harder to get mortgages; house prices have fallen; and house-builders are now experiencing difficult business conditions after years of extremely favourable circumstances.

Although the root cause of these changes is global in nature, the Government has acted to ensure that the housing market weathers the downturn. We need to build more houses to meet increased demand and we need to ensure that, once the current cyclical adjustment has worked its way through, the market is ready to respond to those continuing long-term trends.

We are determined to help ordinary families through this downturn, particularly first time buyers and homeowners who, through no fault of their own, find themselves in trouble as a result of international financial developments that began far beyond our shores.

Prior to the world wide turn down Britain had enjoyed the longest sustained period of economic growth for decades under Labour so our fundamentals are sound.

Under Labour there are one million more households who own their own home and 110,000 have benefited from our low cost home ownership programmes. Even with house price falls, the vast majority of properties are still worth substantially more than when they were bought.

Falling house prices can cause anxiety for some but for others it make homes more affordable. Most importantly of all, mortgage rates remain low – and well below the levels that caused such difficulties in the Tory recessions of the 1990s.

But we do not underestimate the scale of the current difficulties and we are in no way complacent about the scale of the challenge which is why we’ve just announced a £1 billion Homeowners Support Package to help first time buyers, assist people hold onto their homes and remove all stamp duty on homes up to £175,000.

And other measures will be taken to ensure we come through these challenging times in as fair a way as possible.