Money Saving Expert founder Martin Lewis today urged the new Chancellor to announce a support scheme for the current mortgage crisis and to commit to increasing benefits and the state pension in line with inflation. This morning, Mr Hunt announced a series of U-turns on the Government’s mini-budget which had been announced three weeks ago after it caused severe volatility across the UK’s financial markets.
He said: “We are now back in the position we were now back when this started except there has now been damage to the economy in the meantime and is going to have a knock-on effect on people’s pockets. It’s been a very sorry affair.”
However, Mr Lewis had noted that the Chancellor’s statement seemed to have stabilised things which he highlighted was very “important”.
When asked by presenter Jo Coburn what more does he want to hear in Mr Hunt’s statement this afternoon, the two things Mr Lewis highlighted were mortgage intervention and confirmation that benefits and the state pension would rise in line with September’s inflation figures.
The inflation figures are set to be announced on Wednesday this week.
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Mr Lewis said: “Those are normally the figures which pensions and benefits are uprated on and I think we need to get rid of this debate and say right, benefits will be uprated with inflation and not with average earnings.
“I think there are a lot of desperate people who are feeling vulnerable because of the cost of living crisis and they need to be given reassurance as well as the markets.”
Ms Truss has faced increased pressure over the last two weeks over whether benefits were going to rise in April next year.
This is because the former Prime Minister and Chancellor, Boris Johnson and Rishi Sunak, had promised that benefits were going to rise with September’s inflation figure next year.
However, Ms Truss could not confirm that the promise was going to be upheld and she, as well as several of her cabinet ministers, stated repeatedly that “the decision hadn’t been made yet”.
The debate arose during the Conservative Party Conference in Birmingham and no confirmation has since been announced.
Ms Coburn also asked Mr Lewis whether he had “any sense off the back of today” that interest rates could go as high as what the Bank of England governor indicated previously.
Mr Lewis responded: “We hope that the impact off the back of this is that they don’t have to go up as high or as fast as was indicated because it’s the shock of the speed of the interest rate rises that is really going to hurt people.
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These examples included more flexibility for people to be able to change their terms and change it back, mortgage payment holidays and a change to the affordability tests.
He said: “At the moment, people are applying for five percent fixes and are being rejected because they fail the affordability test, and that means they have to have an even higher rate.
“If you can’t afford the cheaper rate how can you afford the higher rate?”
He said the Government’s mortgage plan should be in place by Christmas to put the country in a position to help people if interest rates continue to go up.
Mr Lewis said: “Regulatory intervention shouldn’t cost the state but we need to start focussing on those things and doing it soon.”
The Money Saving Expert did agree that the Chancellor had a grip however he noted that the political volatility around the Prime Minister “wasn’t good for anybody”.
Politics Live airs weekdays at 12:15pm on BBC Two