Julian Knight: Don't shoot the minister when he's talking sense on debt

Politicians have gone out of their way to stem repossessions, and they deserve some credit
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The Independent Online

OK, this isn't a sentence I thought I'd ever write, but here it goes: Sometimes I feel sorry for politicians.

There, I've written it. I don't feel sorry because of their pay (although I do think MPs should be paid more than school deputy-head teachers – which they aren't, at present), or expenses (let's not even go there), or their hours, or the fact that they can get tossed out of office every five years (that's a level of job security most of us would love). However, where I do feel sorry for politicians is when they choose to occasionally move away from sound bites and glib phrases and end up getting crucified for it.

Take, for instance, the Housing minister, John Healey. He probably had a pretty bad Friday when he woke to headlines screaming that he had said: "It's OK to lose your home." Uncaring and out of touch, yes? No, not at all. What Mr Healey said, in full, was: "For some people, it can be the only, and it can in fact be the best, option for them to allow their home to be repossessed. Sometimes it is impossible for people to maintain the mortgage commitments they've got. It may be the best thing in those circumstances."

That is an eminently sensible and true statement. I've covered indebtedness for more than a decade, I have visited call-centres dealing with people at their wits' end, and I have heard advisers break the news that to allow an orderly repossession is the right course of action. It can be the best of a series of unpleasant options to cauterise the loss and, hopefully, to start again in a few years' time. We often curse politics as vacuous in this country, but what do we expect when you get a minister saying something sensible and he gets trampled on? Sometimes we get the politics and politicians we – as a country – deserve.

You can accuse this government of many things, but not of being flippant about repossession. There has been a concerted effort in this Labour recession – unlike the Tory one of the early 1990s – to stem repossessions. Lenders have been strong-armed into agreeing to hold off and, as a result, we have seen fewer instances of banks seizing homes because they fear that if they don't take them sooner rather than later then either another lender will go for repossession or the value of the home will fall substantially. If you want evidence, just look at the latest repossession order figures, down 42 per cent year-on-year in the final quarter in England and Wales. Normally, at this stage of the economic cycle, you'd expect repossessions to be still rising. There may be as many as 100,000 families who are in their homes today because the Government recognised that, in this instance, intervention was right.

A good time to buy euros

I have indulged in a bit of almost unheard of (for me) forward planning by buying all my summer holiday euros. The travails of Greece have forced down the euro against the pound, making it a good time to buy. Medium term, the strength of the French and German economies and weakness of Britain is bound to lead to a strengthened euro against the pound. In addition, the euro has become a major world reserve currency, not quite rivalling the dollar but more than holding its own.

As for those blaming the euro for Greece, Spain and Portugal's mess (I exclude Ireland from this group of ne'er-do-wells because it has undertaken a painful but correct austerity budget) – that's a nonsense. It's purely down to overspending and gutless government.

The straitjacket of the euro was no boon for Germany, yet it has managed the mind-boggling ongoing expense of reunification, and even entering the euro at too high a rate, by suppressing costs at home. There was no shortage of pain for the Germans, but they have such a strong fiscal position they could bail out the disordered and profligate Mediterranean countries. The euro is fine, it's the pound I'm worried about.

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