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Baroness Hayman: Yes, my Lords. My noble friend is certainly right. This is a great improvement compared with the peak of repossessions which was reached in 1991, when about 75,500 homes were repossessed. The figures have been falling steadily since then, but we are obviously concerned that we still have a legacy from those very dreadful days in the 1990s. That is why the Government have taken action to implement our manifesto commitment to work with mortgage providers to encourage greater provision of flexible mortgages to protect families. My honourable friend the Minister for Local Government and Housing and other colleagues from the Department of Social Security have met the Council of Mortgage Lenders and the Association of British Insurers and asked them to look at ways of improving the quality and coverage of mortgage payment protection insurance for such families.

Lord Clark of Kempston: My Lords, does the Minister agree that the seven increases in the bank rate have created tremendous hardship for the many thousands of home owners with mortgages? Discussions with the ABI and the Council of Mortgage Lenders are all very well, but, unless the responsibility for calculating the base rate is taken back by the Chancellor of the Exchequer, those with mortgages will still suffer hardship.

Baroness Hayman: My Lords, I do not think that my right honourable friend the Chancellor of the Exchequer is abrogating responsibility in his management of the economy. We have debated the Monetary Policy

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Committee of the Bank of England, including the specific issue of interest rates, at some length in your Lordships' House. The Government's position on that is well known. It is in the best interests of economic policy that that committee should consider inflation rates. Of course, it takes into account all the evidence when interest rates are set.

The noble Lord raised the issue of the effects of interest rate rises on home owners. Of course there are effects in that respect and we must consider them. However, even with the recent rate increases, it is right to point out that housing remains very affordable by historical standards. I remind the noble Lord that the average mortgage rate is now about 9 per cent., compared with over 15 per cent. at the peak in 1990. Moreover, the payment on a typical mortgage of £55,000 is £260 a month less than it was in 1990.

Baroness Ludford: My Lords, does the Minister accept that one of the ways of directly helping mortgage lenders to reduce interest rates would be to join the single currency? Indeed, even a declared intention to do so would probably have a fairly immediate effect in terms of bringing down interest rates and would be a direct financial help to all those with mortgages.

Baroness Hayman: My Lords, I congratulate the noble Baroness on her ingenuity in linking commitments on the single currency to a Question on repossessions by building societies. I believe that the Government's position on the single currency has been made very clear in this House and, indeed, in another place.

Lord Davies of Oldham: My Lords, what does my noble friend the Minister read into the issue of the distribution of wealth in this country when one has seen in recent years very steep increases in house prices in certain parts of the South-East, and absolutely stationary or even lower levels of house prices in other parts of the country?

Baroness Hayman: My Lords, I read many things into those statistics. However, there is one lesson that we must learn both from history and from the geographical differences to which my noble friend referred; namely, that the best help that a government can give to home owners is to ensure a sustainable house market recovery and avoid some of the boom and bust that we saw in the early 1990s--and to do so against a background of a stable and sustainable rate of economic growth and employment opportunities, which will lead to a rise in living standards. Of course, that underpins the Government's economic policy.

Baroness Miller of Hendon: My Lords, is the Minister aware that many of the repossessions are due to the existence of the so-called "mortgage guarantee policies", which actually encourage the lender to call in the mortgage and to claim on the insurance rather than enter into negotiations with the borrower for deferred or different terms when he or she has got into difficulties?

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Can the Minister tell the House what the Government would be prepared to do to try to alleviate the problem for borrowers who run into such difficulties?

Baroness Hayman: My Lords, as I believe the noble Baroness is aware, there is government support through the Department of Social Security for certain borrowers who get into difficulties, especially jobseekers, pensioners and the disabled in certain circumstances. However, the noble Baroness rightly pointed out that there are difficulties with existing schemes and methods of financing mortgages. As I said in response to the preliminary Question, that is why we undertook to work with the Council of Mortgage Lenders and the ABI to ensure that there is better protection for borrowers. We are doing so by encouraging lenders to increase the availability of mortgages with flexible repayment arrangements and to improve the quality and take-up of mortgage payment protection insurance. We welcome lenders' commitment to take repossession action only as a last resort. My honourable friend the Minister for Local Government and Housing will be meeting the Council of Mortgage Lenders on 27th July to discuss proposals in more detail.

Kensington Gardens: Princess Diana Memorial

3.17 p.m.

Lord Blaker asked Her Majesty's Government:

    When they expect a decision to be taken on the proposal to develop Kensington Gardens as a memorial to the late Diana, Princess of Wales and whether there will be an opportunity for parliamentary consideration before that decision.

Lord McIntosh of Haringey: My Lords, the results of the preliminary consultation exercise will be analysed and reported to the Diana, Princess of Wales Memorial Committee in the autumn. If the memorial committee continues to support the proposals in principle, the process of commissioning designs will begin, taking account of the views expressed by the public. Any preferred design would in due course be subject to the formal consultation processes which apply to developments on Crown land and which parallel the planning process as set out in Department of the Environment circular 18 of 1984. The allocation of parliamentary time is a matter for the usual channels.

Lord Blaker: My Lords, does the Minister agree with me that the proposals of the memorial committee involve very big changes to what is an outstanding heritage site and that, therefore, most people would think it quite wrong if such proposals were put into force without full debate in both Houses of Parliament? Would not the best solution be simply to change the name of Kensington Gardens to the Princess Diana Gardens and to use the £10 million thus saved to do

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something positive, like building a children's hospice, which would fit in very well with one of the other proposals of the committee?

Lord McIntosh of Haringey: My Lords, these are, of course, important proposals; and, indeed, they affect a major site. As I said, the allocation of parliamentary time is a matter for the usual channels, but it is open to any noble Lord to table Questions or initiate debates on the subject. The Diana, Princess of Wales Memorial Committee is considering a whole range of ways of commemorating the late princess. The Diana, Princess of Wales Memorial Fund is allocating money to the princess's favourite charities. The figure of £10 million to which the noble Lord referred was bruited about last year. It has no particular relevance to any proposals now under consideration.

Lord Strabolgi: My Lords, is my noble friend aware of the very strong feelings against these proposals for Kensington Gardens by the people of Kensington, Chelsea and Westminster? These views are supported by the local authorities. Will they be taken fully into account before considering proceeding with these proposals?

Lord McIntosh of Haringey: My Lords, I hear what my noble friend says but this is exactly what the consultation exercise is about. In addition to the exhibition which is now being held at the Albert Memorial Visitor Centre, leaflets and questionnaires are being sent out by 20th July to W1, W2, W8, W11, W14 and to SW1, SW3, SW5, SW7 and SW10. That is a wide consultation exercise. Of course the memorial committee will take serious account of the responses to that consultation exercise.

Baroness O'Cathain: My Lords, is the Minister sure that the leaflets which are to be sent out to all these areas of London are detailed enough as regards what is likely to happen with the Diana Memorial Garden, because certainly the press comment--if one reads it--seems to suggest that the exhibition at the Albert Memorial is not detailed enough and does not give enough information to allow people to make a judgment?

Lord McIntosh of Haringey: My Lords, we cannot win, can we? If we provide information that is too detailed, we are told that we have already made up our minds and the whole consultation exercise is phoney. If the information is not detailed enough--according to the noble Baroness--we are told that we are not providing enough detail. Surely the idea of the consultation exercise is for local people and anyone visiting the visitor centre to give their views about what should happen. The whole point about this consultation exercise is that the memorial committee has not made up its mind about the scope or detail of the memorial which is planned; that is why the consultation is genuine.

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