Ministers are addicted to intervention

This week Rishi Sunak ruled out direct government intervention to protect homeowners from impending catastrophe. It’s a welcome development – bailing out mortgage debtors would be financially ruinous and grossly unfair on renters. But just a few days ago the Prime Minister was ordering banks to shield borrowers from surging rates, and the Treasury still insists that the chancellor wants banks to ‘live up to their responsibilities’ – the vagueness of which leaves a lot to be desired. There are reports of ministers working with banks to offer more indirect help, like payment holidays.

It’s unclear whether the Tories will buckle and end up subsidising mortgages anyway. This is a party, after all, which once dismissed the idea of a windfall tax before U-turning, blew £70 billion of taxpayer money on furlough, and pushed through the extortionate Energy Price Guarantee. Downing Street’s careful statement has also left open the door to indirect intervention – perhaps with the reintroduction of mortgage tax relief.