I beg to move

That the Second Stage of the Support for Mortgage Interest etc (Security for Loans) Bill [NIA 42/17-22] be agreed.

The Second Stage of the Support for Mortgage Interest etc (Security for Loans) Bill has been moved. In accordance with convention, the Business Committee has not allocated any time limit to the debate. Glaoim ar an Aire leis an díospóireacht a oscailt ar an Bhille go hoifigiúil. I call the Minister to open the debate on the Bill.

The Support for Mortgage Interest etc (Security for Loans) Bill gives my Department powers to make regulations to enable a statutory charge to be registered against a support for mortgage interest loan. This technical amendment ensures that my Department can meet its original policy intention to allow all support for mortgage interest loans to be secured and consider recovery of loans provided.

Homeowners on qualifying social security benefits can get help towards mortgage interest payments with a support for mortgage interest loan. The primary purpose of the support for mortgage interest loan is to protect owner-occupiers who are receiving an income-related benefit from the threat of repossession. In April 2018, support for mortgage interest changed from a benefit to an interest-bearing loan. This loan is only recoverable from any equity on the sale or transfer of ownership of the property or when the recipient dies.

If there is not sufficient equity to repay the total of the loan, the Department will write off any amount that cannot be repaid. The differences in land law between here and Britain meant that obtaining a similar level of security to consider recovery of the loans was difficult. At present, the legislation allows for a legal charge to be placed on properties where a loan under article 13 of the Welfare Reform and Work (Northern Ireland) Order 2016 has been paid. However, legal charges can only be placed against properties that are registered in the Land Registry. As it stands, 541 of the 1,409 outstanding loans do not have the security of a legal charge. At the current average of £5,000 per loan, approximately £2·7 million of loans are unsecured.

The remaining 868 loan recipients with a legal charge are not being treated equally to the 541 unsecured loan recipients. That could result in a legal challenge. The creation of a charge by the Bill will allow the Department to consider recovery of loans over all properties here, subject to there being sufficient equity in the property after a sale or transfer. If there is insufficient equity to repay the total of the loan, my Department will write off any amount that cannot be repaid.

The support for mortgage interest loan is not registered on the person's credit history and does not affect their credit history in any way. I must highlight that recipients of a support for mortgage interest loan will not experience any charge by the introduction of the Bill. Recipients have been notified of the possibility of a loan being secured by a statutory charge, as it is contained in the information booklet that is supplied to the person when they initially request a loan. It is also contained in the support for mortgage interest loan agreement that is signed by the person before a loan can be paid. In addition, my Department meets all administrative costs, which are considerably lower when a statutory charge is used.

The Bill contains two clauses, the first of which allows regulations to impose a charge on the property in respect of which a support for mortgage interest loan is made and provides for charges securing support for mortgage interest loans to be registrable in the Statutory Charges Register. The second clause deals with the commencement date and the short title of the Bill.

No charges will be created over any properties until the necessary regulations have been made and come into operation. Once the regulations have been made and come into operation, any charge created by the regulations will be registrable in the Statutory Charges Register. It is not intended that the regulations will impose a statutory charge in respect of the past or future loan payments under an existing loan agreement for so long as they continue to be secured by an existing legal charge.

Once the change to primary legislation is commenced and subordinate legislation is amended, all new loans will be secured by statutory charge, which will be registered on the Statutory Charges Register. Unsecured loans will be registered in tranches so as to ensure that resources in my Department and Land Registry can be managed. My officials will be in contact with Land Registry and will maintain contact as the Bill progresses.

It is important that the amendment proposed in the Bill to enable a statutory charge to be used as a method of security on support for mortgage interest loans is progressed to ensure equal treatment for all loan recipients and to provide my Department with a more effective form of recovery on all loans. I commend the Bill to the Assembly.

On behalf of the Committee for Communities, I welcome the Second Stage of the Support for Mortgage Interest etc (Security for Loans) Bill. The Committee received a pre-introductory briefing from the Minister on 4 November, before the Bill's introduction to the Assembly on 8 November 2021. The Committee knows that the primary purpose of support for mortgage interest is to protect owner-occupiers receiving an income-related benefit from the threat of repossession and that the support is available also for corresponding sums under arrangements that do not involve the payment of interest.

The Minister highlighted to the Committee that, in April 2018, support for mortgage interest changed from a benefit to a loan in Northern Ireland. In Britain, that change was included as part of the Welfare Reform and Work Act 2016. The provisions were replicated here in articles 13 to 16 of the Welfare Reform and Work (Northern Ireland) Order 2016. The Committee heard that the Bill will amend article 13 of the 2016 Order to allow a loan provided under that article to be charged on the property in respect of which that loan is made. It will also amend schedule 11 to the Land Registration Act (Northern Ireland) 1970 to enable a charge securing a loan provided under article 13 to be registered in the Statutory Charges Register. That is in line with the policy intention to ensure that a loan is recovered if there is available equity when it becomes repayable. The repayment of such loans is, of course, limited to the available equity after prior charges on a property have been repaid; that means the available funds, once the mortgage and other relevant charges have been paid from the proceeds of the sale.

The Minister highlighted to us the difficulties with the outworkings of the current legislation. Current law allows for that legal charge to be placed on properties, but the differences between land law in Britain and Northern Ireland mean that obtaining a similar level of security to consider recovery of the loans is difficult here. Also, legal charges can currently be placed against properties only where all of the legal owners are included in the benefit unit — meaning a single claimant and his or her partner, if any, or joint claimants — and that is only practicable to secure loans when the property is registered and appears on the title register in the Land Registry. We are advised that around 20% of properties are still catalogued in the Registry of Deeds, and those loans cannot be secured as it stands. Of the 1,409 outstanding loans, 541 do not have the security of a legal charge.

The Committee understands that the Departmental Solicitor's Office has advised that a statutory charge would provide a more suitable form of security. In addition, a statutory charge would simplify the process of transferring a loan from one property to another and aid future proposed amendments to subordinate legislation to defer the recovery of the loan and allow the loan to transfer to another property.

It is a short Bill with only two clauses. As I have outlined, the Committee is fully aware of the background to it and the need for it. The Committee supports the principles of the Bill and looks forward to the scrutiny at Committee Stage. The Minister advised the Committee that the Executive supported an expedited Committee Stage that would, ideally, be completed within 15 working days. However, the Minister also wishes the Committee to provide valuable scrutiny of the Bill.

That brings me to a number of points that I will highlight to the House. First, the Committee has been advised by the Bill Office that there is no official expedited Committee Stage; there is only Committee Stage or accelerated passage. Secondly, the Department has not consulted on the Bill, for the reason that loan recipients have been notified of the possibility of the loan being secured by a statutory charge, which is contained in the support for mortgage interest loan agreement. If that loan agreement is as technical as the rationale for this short Bill, it is clear that the Committee needs to conduct a proper Committee Stage on the Bill in the absence of any prior consultation. That will allow relevant groups and individuals to comment on the proposals. The Committee will issue a call for evidence and views next week and seek a research briefing. It will be guided by the outcome of those to determine whether there are any key issues on which we need to take oral evidence. Thirdly, it is not of the Committee's making that we are considering the Bill only now. The provisions of the Loans for Mortgage Interest Regulations (Northern Ireland) 2017 came into operation over three years ago, and it has taken until November 2021 for the Bill to be introduced.

In response to a Committee query on the Bill, the Minister has confirmed that, since support for mortgage interest loans were first introduced in April 2018, out of the 1,645 loans paid out to date, there have been only four repossession cases. Three loans were written off due to insufficient equity, and one was successfully recovered.

The Committee does not wish to give itself extra work — believe me, we have enough already — but nor can we do a cursory Committee Stage, because we have already seen in every Bill that we have considered to date how any clause of any Bill can throw up unintended consequences. I assure the Minister that the Committee will not take longer than necessary, but members are not convinced that the Bill should leapfrog in front of the three important Bills that are already at Committee Stage with us. As I said, the Committee is supportive of the principles of the Bill and looks forward to considering it in further detail at Committee Stage.

I thank the Minister for outlining the rationale for bringing the Bill before the House and for the briefing that she provided to the Committee on 4 November. As the Minister and the Chair of the Committee have noted, the Tory Government made the decision at Westminster to end the support for mortgage interest as a benefit in April 2018, and, in line with the parity principle, it was introduced in the North at the same time.

After that date, support with mortgage interest became a loan that would have to be repaid with interest when the house was sold or transferred.

We acknowledge that the change of the support for mortgage interest from a benefit to a loan has been challenging for the Department, particularly in having to maintain parity, despite the fact that there is a difference between land law here and in Britain. Here, it has been compulsory to register a property only since 2003, which means that the regulations drafted in Britain did not provide the necessary legal certainty for the loan on unregistered properties here. Additionally, of course, some properties will have joint owners or a number of owners, all or many of whom are not in the social security system. Both those issues mean that a legal charge could not be put on those properties, and, whilst that does not mean that the loan cannot be recovered, it makes the process slow and complex and reduces the likelihood of success for the Department. We appreciate the reassurance given that those who avail themselves of the loan will not experience any change as a result of the Bill and that it remains the case that the Department will seek to recover the loan only where equity is available at the time of sale or transfer.

The purpose of this short Bill, as explained by the Minister and the Chair of the Committee, to change the legal charge on properties to a statutory charge where necessary and, as I understand it, to introduce the statutory charge as a standard practice for new loans will enable us to ensure that all loans are treated the same. I accept that there is a requirement for legal certainty in this area, and, on that basis, I support the Second Stage of the Bill and look forward to giving it further scrutiny in the Committee.

This is a short Bill, as has been stated, and today's debate will be short too. However, the passage of the legislation will not be as swift as the Minister would like, because, as the Chair of the Committee outlined, it would be irresponsible of the Committee to forgo full scrutiny of the Bill. I thank the Chair, who comprehensively covered what the Bill entails and its purported intention to protect owner-occupiers who receive an income-related benefit from the threat of repossession, as well as outlining the Committee's position.

The Chair and others have mentioned the fact that, in April 2018, support for mortgage interest changed from a benefit to a loan. I would like to touch on that briefly. I acknowledge the fact that that was introduced by the Tories as an element of the Welfare Reform and Work Act 2016, but it is important to note that that was not merely foisted on us in a vacuum; rather, some parties in the Assembly gave the Tories the power to do it. Rather than providing low-income and struggling households with mortgage interest costs via a benefit, the process was made more complicated and less accessible and was converted to that of a loan.

I have to admit that, when I heard that legislation was coming on mortgage support, I got rather excited, and that does not happen often here. Maybe I should say that I was relieved, given several indications that I received from the Minister that she was reconsidering introducing the benefit or, at least, bringing forward new support for people struggling to pay their mortgage. I have consistently appealed for improved financial support for homeowners who have struggled to keep up with mortgage payments throughout the COVID pandemic, given the fact that Northern Ireland has a greater proportion of homeowners in poverty than anywhere else across the UK. In fact, we have twice as many households behind with their mortgage payments, according to research from the Joseph Rowntree Foundation — a position that has, more than likely, worsened over the past 20 months, given the economic consequences of the COVID crisis.

The financial impact of COVID-19 has exposed the vulnerabilities of homeowners, who were provided with minimal assistance and placed at a greater risk of homelessness as a result. Initially, the Communities and Finance Ministers advised that mortgage support was a matter for Westminster. At the height of the pandemic, in response to my Assembly question to the Minister's predecessor and party colleague, Carál Ní Chuilín, I was advised that the SMI and the universal credit uplift were already in place to support people struggling to make mortgage payments. That position softened somewhat as the Minister came under a bit of pressure, maybe, to provide support. She has indicated to me on several occasions that a mortgage rescue scheme is under consideration. Ulster University's Economic Policy Centre was commissioned to research the establishment of a mortgage support scheme. Has that research been completed, will it be published, or is the Minister in a position to tell us any of its findings or recommendations?

Given the cruel cut to universal credit, the end of mortgage payment holidays and the clear shortcomings of the SMI loan, what safety net is in place for homeowners? What meaningful assistance will the Minister and her Department put forward? Essential reforms must be made to SMI if it is to provide any real assistance to struggling homeowners. We have to prevent people from falling into more debt and save more families from homelessness and the plethora of problems that comes with that. We need to use every tool at our disposal to do so. If those tools do not exist, we should look to develop them. That is the legislation that I would rather be debating today, and I have no doubt that the Committee will look at that. Instead, the Bill seems to be as much about protecting the Department as about protecting people. That is hugely regrettable, given the precarious financial situation that so many homeowners find themselves in or will soon find themselves in.

The comprehensive legislation has not been tabled in this mandate. I implore the Minister to act on her pledge to protect the most vulnerable and consider bringing forward a mortgage rescue scheme. People have already waited too long and face too much uncertainty. They need the support now more than ever. We certainly support the broad principles of the Bill. I just fear and feel that we are looking at another missed opportunity to help people in need.

On behalf of Alliance, I start by saying that we will, of course, support the Bill through its Second Stage. Unfortunately, Mr Durkan stole some of my thunder when he referenced the Joseph Rowntree Foundation. We need to help our homeowners. Many struggle, and many people are now known as the "working poor".

Minister, when I hear "write off debt", as a Committee member, my ears prick up. We have to protect public money. I raised that when you briefed the Committee. The explanatory and financial memorandum states:

"Unless a default event occurs, the current regulations and loan agreements provide that a loan is only recoverable from any equity on the sale or transfer of ownership of the property or when the claimant (or their partner) dies."

When I asked for clarification about that "default event" — for instance, sadly, when someone has their house repossessed — and whether the loan would be recouped from the assets or the money from the sale of that house, the Department said that that would be the case only if money were left. I am concerned about that. If someone has an SMI and their home is, unfortunately, repossessed, it sounds as if we, as government, will lose money and that debt will be written off. I do not wish to cause more problems for people who find themselves in that horrendous situation. However, if we are named as a creditor and, as government, are able to claim back that money, we can protect the public purse.

Minister, I support what you are trying to achieve with the Bill. It will go through Second Stage. The Committee will discuss the Bill. We need to get clarification on the matter that I just mentioned. We also need to find out what is happening with the Department of Finance to ensure that all properties are on the title register in Land Registry so that we can ensure that there is security on those loans. There is much to work through, but I promise you, Minister, that we will work on this as hard and as fast as we can. You are certainly giving us a lot of legislation to work through, but our Committee is up for it.

First, I apologise to the House for my voice. I was up last night shouting at Italians, telling them that they were a very ordinary-looking San Marino, so you will forgive me if my voice fails. I am sure that it would bring great comfort to the House if my voice were to fail.

The Bill is very short — two clauses — and seems to be technical in nature, and it is fair to say that most people will never be affected by it at all. However, that does not negate the importance and significance of the Bill, and, when I read the advisory notes, it is clear that the Bill contains only two clauses. The first clause allows regulations to impose a charge on the property in respect of which a support for mortgage interest loan is made. It also provides for charges securing support for mortgage interest loans to be registrable in the statutory charge register. The second clause deals with the commencement date and the short title of the Bill.

I agree with Members across the House. When you read the title of the Bill — the Support for Mortgage Interest etc (Security for Loans) Bill — it suggests all sorts of manifestations, yet it does not really produce what it says on the tin. The title of the Bill is slightly misleading in that I do not think that it gives support or succour when it is not there. However, I understand the technicalities around this and why it needs to be done, because, as Members across the House said, we need to be careful with public money and how we protect it. We should treat it as an asset, as we do with our own assets and our own money, because we are the guardians of public money. It is a very important Bill.

If the Bill is very important, it needs to be given the parliamentary respect that the House provides, so I find myself on my feet, not for the first time in this term, having to defend the very good practices and procedures of the House from a Minister who wishes us to do something else. She is not alone in doing that during this term. It strikes fear into me that the Assembly would even contemplate some of the wishes of Ministers and the Executive or the asks that they have made of it over this last term. It frightens me that officials and Departments think that they can do this and think that they can push an Assembly and its Committees into positions that are not necessary, are not procedurally correct and, in some cases, will be dangerous to the democratic process and, by extension, the people out there whom we serve.

I put on record that there is no such thing as an expedited Committee Stage that takes 15 days. There is no such thing. It does not exist and, more importantly, should not exist. There is only a Committee Stage or, alternatively, accelerated passage, and whilst I have misgivings about accelerated passage, I know full well that, at times, it is required. When it is required, it is used, but it is the Assembly that decides whether to grant accelerated passage, not any other body, collective or organisation. It is not the Executive; it is the House.

Why should we not have an expedited Committee Stage? Quite simply, it is because a Committee's work on any Bill is probably one of the most important stages of the democratic process. It is where you have the space and time to be devil's advocate, the space and time to assess evidence and the space and time to collect that evidence. To collect that evidence, you need time. You need time to go out and consult, seek out experts, communicate and gather the evidence that people submit. It then takes time to diligently go through every scrap of evidence that you have collected.

That is the duty and role of a Committee. It is even more important — it becomes vital — in an Assembly like ours, where we have an Executive with a mandatory five-party coalition. The Committee becomes the Opposition. Using the evidence that we are given by outside experts, we can scrutinise every clause. It is, in essence, the model of co-design. It is exactly what we want to push and get to in our deliberations. To produce or invent an expedited stage does away with all that and does great harm to the democratic process of which we are the guardians.

Once again, I feel the need to defend the democratic procedures of the House against Ministers who want to change them. This is not the first time, and it is not only this Minister. In fact, this is the first time that I have had to speak about it with this Minister. I understand why the Department and the Minister want to push through as many Bills as possible, including this very important one: we are coming to the end of a mandate. However, that is precisely why we need to take our time and be diligent. We are coming to the end of the mandate, and Bill after Bill is coming before Committees. It is the time when we must be at our most diligent.

I support the principles of the Bill at Second Stage. I look forward to it coming to Committee, as will all the other Bills that the Minister, and any private Member for that matter, have brought forward. We will do our job as diligently as we can, and we will do it professionally. We do not need anybody handicapping us or holding us back. When the Bill becomes an Act, we will have to answer to the population on the role that we played in it. I want to be able to say that the Committee that I sat on did its job diligently, looked through the Bill and collected all the evidence that it could to make this legislation the best that it could be.

Are there are gaps in the Bill? Absolutely. Could it do a lot more? Yes, it could. Are we coming to the end of a mandate and struggling for time? Yes. However, we will scrutinise what is in front of us and see whether we can make it better. If we cannot and are happy enough with it, we will pass it through Committee Stage. That is our job and our role. My plea to Ministers is not to impede that work. It is a democratic process, and it needs to be in place.

Glaoim ar an Aire le críoch a chur ar an díospóireacht ar an rún. I call the Minister for Communities, Deirdre Hargey, to conclude the debate on the motion.

I thank all the Members who have contributed to the debate on Second Stage. I also thank the Chair, Deputy Chair and Committee members for their deliberations on the Bill.

Initially, when I brought the Bill to the Executive for accelerated passage, it was not to hide anything — the Bill has two clauses, there is nothing to hide, and people grasp its principles — but because we are in the midst of a pandemic and running out of time in this mandate. The policy is there, so this is not about changing the legislation or policy. On the naming of the Bill, I did not make it up. That was created when the Bill was created. Therefore, I have to call it by the same name. I cannot change that without a lot of wrangling around changing the name. We are not here to do that. We are here to do business and to get stuff done. The reality is that we are running out of time. We have only until March and, as the Committee itself has said, I am putting through huge pieces of legislation on which the Committee is deliberating.

The idea of expedited passage came from other colleagues on the Executive. You need to speak to your colleagues about where that came from. It certainly did not come from me, but I was happy, in trying to get consensus, to put it through so that we could take it to the Committee. I am also happy if the Committee wants to take some extra time. I have no problem with that or with working with the Committee. I have shown in the past that I am willing to work with the Committee to make amendments or changes to ensure that we put legislation through.

This is a technical amendment. That is the point of the legislation. Trying to dress it up as something else is disingenuous, because that is not what the Bill is about. It is about making a technical amendment to an existing policy to ensure that that policy and its intent treat everybody fairly and that there is equality. Indeed, the Bill has been equality-screened and rural-proofed, and it stacks up. It is a technical amendment, and I am not pretending that it is something else. We are doing work with Ulster University and others to look at the broader issues that need to be addressed, but I am not going to address those in a technical amendment to a Bill that is about making sure that we treat everybody fairly. My priority, as you know, because you have commended the Department previously, is about protecting the most vulnerable. You know that, and you commended the Department on that previously. We are trying to do that in the midst of a health pandemic, a cost-of-living crisis, a global fuel crisis and all those challenges.

Again, I am happy to work with the Committee. If it wants to take the full length of time or does not want to do it in this mandate, I will obviously raise my concerns about that. However, I will work with the Committee on the time that it needs and I thank its members.

I know that Kellie — sorry, the Deputy Chair — raised concerns previously about repossession, which we will obviously continue to look at. Regarding the repossession of properties by mortgage lenders, if it is a default event for an SMI loan and, as such, brings the agreement to an end and requires a repayment of the loan to the Department, while the Department has no direct relationship with lenders and no power to influence the decision of the recovery of the mortgage moneys, lenders are regulated by the Financial Conduct Authority in terms of how they deal with mortgage contracts and repossession cases. The Department is happy to look at that in more detail at the next stage, and there may be other people whom you can bring in as part of your call for evidence to scrutinise that in a bit more detail.

At this point, I am asking that the Bill move to the next stage to allow the Committee to carry out its scrutiny role. It wants to do that in more detail, and I completely respect that.

Question put and agreed to. Resolved:

That the Second Stage of the Support for Mortgage Interest etc (Security for Loans) Bill [NIA 42/17-22] be agreed.

That concludes the Second Stage of the Support for Mortgage Interest etc (Security for Loans) Bill. The Bill stands referred to the Committee for Communities.

The Business Committee has agreed to meet at 1.00 pm. I propose, by leave of the Assembly, to suspend the sitting until 2.00 pm. The first item of business when we return will be Question Time to the Minister of Finance.

The sitting was suspended at 12.44 pm.

On resuming (Mr Speaker in the Chair) —