Oldham first up for relief

A £200m mortgage rescue scheme to allow people to switch to renting their homes will be speeded up to start next week in Oldham, the Government announced.

Chancellor Alistair Darling said Oldham was among 60 areas where the mortgage rescue scheme will be fast-tracked.

Under the scheme, eligible home owners will be offered either a shared equity option, reduced mortgage payments, or the option to sell to a housing association and remain in the property as a tenant.

And the Chancellor confirmed major mortgage lenders have agreed to wait three months before seeking repossession.

Many of the tax changes were leaked in advance, including the cut in VAT from 17.5 per cent to 15 per cent which will kick-in on Monday. But drinkers and smokers will not benefit — duty on alcohol and tobacco is to be raised by 2.5 per cent.

This year’s £120 tax cut for all basic rate taxpayers — achieved by raising personal allowances — will be made permanent and increased to £145 in April, helping 22 million people.

People earning less than £40,000 would be better off, while those earning £40,000 to £100,000 would be £3 a week worse off on average.

Mr Darling said increased child benefit would be brought forward from next April to January.

Pensioners and families with disabled children would be given a one-off payment of £60 in January.

Oldham East and Saddleworth MP Phil Woolas said: “I am glad that there is something for areas like ours, investment in projects in Oldham will continue.”

Oldham West and Royton MP Michael Meacher said: “This is an excellent proposal and it will bring immense relief to the people of Oldham.”

Today, the Chancellor defended his £1 trillion gamble to drag Britain out of recession, saying he was doing the “right thing”.

Mr Darling said it would have been wrong to walk away and leave people to “sink or swim”.

“I do not think that is the right thing to do,” he said. “People expect the Government to help them. We will be helping people.”

But Shadow Chancellor George Osborne said the best way to stimulate the economy was through cuts in interest rates and “not, frankly, taking a huge risk with public finances”.