Davey: Truss must cancel Conservative conference to deal with economic crisis

EMBARGO: For Immediate Release

• Ed Davey demands Liz Truss and her ministers spend time fixing the budget as new research finds Government energy bill support will be wiped out by higher mortgage bills 

• Typical family faces £2,000 rise in mortgage bills following last week’s disastrous budget

Liberal Democrat Leader Ed Davey has called on Liz Truss to cancel the Conservative party conference this weekend, and instead recall Parliament to vote to fix the disastrous mini-budget. The party is also calling on the Government to bring forward a rescue package for homeowners unable to pay higher mortgage bills as a result of last week’s budget. 

Ahead of the energy price cap rising on Saturday (1st October), new analysis by the Liberal Democrats reveals the predicted rise in mortgage bills is more than double what the Government has offered to support households with their energy bills. 

The Government has pledged to freeze energy prices at £2,500 for the average household, which would have equated to around £1,000 support for the average household.

However, the fallout from last week’s budget is predicted to force the Bank of England to raise interest rates to as much as 5% next year, costing the average mortgage borrower on a Standard Variable Rate a staggering £2,100 per year. Those on an average tracker mortgage would face an even higher annual increase of £3,000 per year if interest rates rise to the predicted 5% next year. 

Liberal Democrat Leader Ed Davey said: 

“There is no way the Conservative Party can hold their conference whilst the British economy nosedives. The arrogance of Liz Truss and Conservative Ministers is frankly an insult to millions who now face higher bills as a direct result of last week’s budget. From this weekend they will abandon their posts in Downing Street, leaving a mess behind them and heading for the cocktail parties and mutual back-patting of the classic conference season. 

“In one fell swoop, Liz Truss and Kwasi Kwarteng crashed the economy, trashed the pound and paved the way for record interest rate rises. 

“Innocent mortgage borrowers will be left to pick up the bill of this gross incompetence. It is time Parliament is recalled and new measures passed to save families and pensioners unable to cope with this mortgage crisis. This botched budget cannot survive any longer.” 

ENDS

Notes to Editor:

According to UK Finance, a 0.25 percentage point rise in rates would result in an additional £25.76-a-month mortgage payment for an average tracker rate customer, and £15.96 for a typical borrower on a Standard Variable Rate loan.

This suggests that if the Bank of England raises interest rates to 5%, up from the current 2.25%, tracker customers will see an additional £283 a month, whilst SVR borrowers will get hit with an extra £175 a month (£2,106 per year)

Hit to typical SVR (Standard Variable Rate) and tracker mortgage if BoE interest rate reaches 5% - compared to its current level of 2.25%