Lilley in clash on mortgage insurance


Political Correspondent

Peter Lilley, Secretary of State for Social Security, attacked mortgage lenders for taking "fat commissions" on mortgage insurance policies and accused their spokesman of being "extraordinarily complacent", in a row over his plans to persuade people to take out private insurance to protect themselves if they are unemployed or sick.

He clashed with Adrian Coles, director-general of the Council of Mortgage Lenders, as a report commissioned by the Government said mortgage protection policies are no substitute for social security benefits.

Mr Coles said on BBC Radio yesterday: "There is a clear indication in the report that mortgage protection policies sold by insurance companies to home-buyers are not really worth a great deal."

Mr Lilley responded: "It is his members who have been selling these policies. If he thinks they are as worthless as he is pretending, presumably they will now be handing back the fat commissions they have taken."

He defended his plans to replace Income Support, which he intends to withdraw for mortgages for the first nine months for new claimants from this October. He said Mr Coles was "being extraordinarily complacent. He wants to see continue a system which allows 50,000 repossessions a year ... We want to make sure that in future anyone who takes out a mortgage has proper protection."

He rejected the findings of researchers at Loughborough, who were asked by the Department of the Environment to look at the problems of mortgage arrears and repossessions.

The report says policies do not seem to offer adequate protection. "It is hard to see what could be gained by expanding them in their current form. Indeed, it could be argued that in many instances they take borrowers' resources that might otherwise be put towards mortgage payments, while offering little in return."

Nick Raynsford, Labour housing spokesman, said: "This is the Government's own report and it provides conclusive evidence that Peter Lilley's plan is misconceived." Labour will oppose the regulations making the change in the Commons, with the support of building societies and banks, which fear they will undermine confidence in the housing market by increasing repossessions.

The Loughborough University study found that two-thirds of claims on mortgage protection policies were unsuccessful. t Mortgage Arrears and Possessions: Perspectives from Borrowers, Lenders and the Courts; Janet Ford, Elaine Kempson and Marilyn Wilson; Dept of the Environment; HMSO; pounds 25.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksA celebration of British elections
Floyd Mayweather will relinquish his five world titles after beating Manny Pacquiao
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
Tottenham legend Jimmy Greaves has defended fans use of the word 'Yid'
Life and Style
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Digital Marketing Consultant

£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...

Recruitment Genius: Assistant Stores Keeper

£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Software Developer - C# / ASP.NET / SQL

£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living