THE leader of the Scottish Conservatives has said mortgage payments are “an absolutely huge concern” – despite backing the UK Government’s mini-budget which precipitated the crisis.
Douglas Ross has publicly backed the move from Chancellor Kwasi Kwarteng to slash taxes on the rich, funded by increased government borrowing, despite the economic fall-out which it has resulted in.
The pound fell to its lowest ever level against the US dollar, with the International Monetary Fund taking the extraordinary step of urging the Tory government to change course, and the Bank of England being forced to step in to prevent pension funds collapsing.
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The Tory-inflicted economic crisis had led to suggestions that the UK's central bank may need to raise interest rates to as high as 6%.
MoneySavingExpert.com founder Martin Lewis said that scenario would be “catastrophic for mortgage holders”, highlighting the costs it could add to monthly bills.
“There is a ticking timebomb going on in mortgages if UK interest rates follow what the market is predicting,” Lewis said.
Speaking to journalists in Holyrood, Ross was asked how worried he was about people’s finances.
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“It's an absolutely huge concern,” he said. “I'm a mortgage payer, like the vast majority of people here in Scotland and across the UK. That's a considerable concern.
“I think it is right that in terms of tax reductions that we see as many people, from lower earners through the tax system, paying less tax so they have more of their own money to spend in local economies, supporting local businesses.
“But that is being offset at the moment by, as we see, the increasing interest charges, and people are struggling and we've got to do everything we can to support them, support businesses.”
Ross has called for Scotland to imitate the tax cuts brought in by the UK Government – despite the severe economic consequences they have led to.
Someone in his position would be set to save thousands of pounds every year if the Scottish Government were to do so.
However, people in the lowest income households will save just £22.12 a year thanks to the Tories’ tax cuts, according to analysis from the Resolution Foundation.
According to Moneyfacts, 41% of all mortgage products on the market have been withdrawn since Kwarteng announced his “mini-budget”.
Appearing on BBC Stoke on Thursday morning, Prime Minister Liz Truss was stumped when asked about the impact of her policies on people’s mortgages.
Sweet lord. The PM is literally lost for words on BBC Stoke when questioned about mortgages. pic.twitter.com/BGCv0RfMBR
— Dino Sofos (@dinosofos) September 29, 2022
“We’re going to spend more in mortgage fees under what you’ve done, based on the predictions, than we would have saved on energy [also under her plans],” she was told.
Truss responded with silence, before changing the subject.
Ross told journalists that the “biggest single element” of the Tories’ mini-budget was the announcement of more than £60 billion in energy bills support.
That is £5bn less than the Bank of England has been forced to spend buying long-dated Gilts in an attempt to calm chaotic markets.
Ross said that Rishi Sunak had “predicted a lot of what has happened" during the Tory leadership campaign, but again declined to say who he had backed to win the race.
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