From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to for wider content and updates from UK Finance.

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Welfare Reform and Work Bill passes its first hurdle

Week in Westminster

Published: 24 July 2015 | Author: Michelle Vosper

MPs debated the Welfare Reform and Work Bill during its second reading this week. Despite nearly 50 Labour MPs defying acting Labour lead Harriet Harman by voting against the Conservative’s welfare cuts, the bill passed its first hurdle by 309 votes to 123.

Two of the Bill’s provisions of interest to the industry are to turn support for mortgage interest into a loan, and the reduction of rents in social housing in England by 1% a year for four years from April 2016. Shadow DWP minister Stephen Timms gave his party’s support in principle for the proposals but warned that it should not make affordability problems worse for borrowers, arguing that those who have access to this support should be able to defer repayment until the property is sold. On the Budget announcement to increase the waiting period for support for mortgage interest from 13 weeks to 39 weeks, Mr Timms said “that is too long. As it is a loan scheme, why make people wait…with support for mortgage interest becoming, in effect, a form of low-risk consumer credit, it should be readily available without nine months delay to those struggling to make repayments.”

The shadow minister welcomed the plans to reduce social housing rents, but said “we have grave concerns about the impact on housing associations and local authorities. They will face a huge reduction in rent revenue, drastically undermining their capacity to borrow and build”.

The chancellor launched the 2015 spending review, asking government departments to model scenarios in which their budgets are cut by either 25% or 40%. The outcome of the spending review will be published on 25 November.

The chancellor gave evidence of his Budget proposals to the Treasury committee. Answering questions on the buy-to-let market, Mr Osborne said that the decision to reduce tax relief on buy-to-let, announced in the Budget, was driven by both concerns around fairness moving towards a more level playing field between buy-to-let and residential mortgages,  and the recent growth seen in the buy-to-let market. On the Bank of England’s powers over buy-to-let, Mr Osborne said the Treasury is considering directional powers for the Bank and that an announcement would be made in the next couple of months.

Meanwhile, the Treasury announced that the Bank of England Bill to improve the Bank’s governance and accountability will be introduced in the autumn, and published a consultation seeking views on the reforms.

The Mortgage Credit Directive (Amendment) Order 2015 has been laid before Parliament. The Order makes a number of amendments to the original Mortgage Credit Directive Order 2015. This statutory instrument is subject to negative resolution and will be published at a later date. In addition, the draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No3) Order 2015 has been published for Parliamentary approval and supplements the Mortgage Credit Directive Order.

The government’s proposal to extend right-to-buy to housing associations has received much criticism, particularly in the House of Lords. This week, Baroness Hayter of Kentish Town introduced an amendment to the Charities (Protection and Social Investment) Bill to ensure “independent charities are not compelled to use or dispose of their assets in a way which is inconsistent with their charitable purposes”. This amendment resulted in a number of peers expressing their concern about the right to buy proposals which, if the amendment had been passed, would have blocked these plans in advance of the publication of the Housing Bill. The amendment was voted down by 257 to 174.

Less than three years since it was launched, the Green Deal has been axed. DECC announced that there will be no further funding to the Green Deal Finance Company, thereby effectively ending the scheme. 

Parliament is now in recess, returning on Monday 7 September 2015.