Teresa Hunter: Generation gain can help unlock housing gridlock

WHILE taxpayers' attention was hooked on duck soup, Jacuzzis and sundry other frippery, a quiet revolution was taking place in the mortgage market.

Lloyds TSB launched a new first-time buyer loan, which showed genuinely innovative thinking, and could help unlock the gridlock.

The latest data points to property still in desperate decline. Lending in April fell 9 per cent compared with March, and at £10 billion was shockingly 60 per cent lower than a year ago. So much for green shoots.

Whatever they say, banks still aren't lending, except to the safest borrowers. The rest fall at the many hurdles put before them.

This new loan could turn things around, by giving hope to anyone eager to step onto the ladder but with only a small deposit of, say, 5 per cent. It treats them as though they have 25 per cent to put down.

How so? With the support of parents, or indeed grandparents. They deposit some savings in a Lend–a-Hand savings account, and the bank takes a charge on it for extra security.

It works like this. You want to borrow £95,000 on a £100,000 property, and have a£5,000 deposit. If your parents pledge £20,000, you can fix your rate at an attractive 4.39 per cent over three-and-a-half years, while your parents earn 3.5 per cent interest.

It's not risk-free. If the property is repossessed your parents could lose their nest egg. But you only have to stick it out for just over three years, and your parents can probably exit the arrangement for good.

It's a brilliant idea. And while no one would wish to encourage young borrowers to buy into a falling market, there are some outstanding bargains to be had. And every first-time buyer can unlock up to six other property transactions.

More like this please.

Full Marx for tax parity

Did I say Duck Soup? I must be going quackers. I, of course, meant duck island. A Duck Soup is what the American's call a sucker in a fix.

It's also the name of a Marx Brothers masterpiece, satirising corrupt government. Set in Freedonia, this fictitious bankrupt state is on the verge of revolution when Groucho is put in charge.

He launches his manifesto in song. "No one's allowed to smoke, Or tell a dirty joke, And whistling is forbidden..." Who'd think this was written in the 1930s? It goes on....

"The country's taxes must be fixed, And I know what to do with it, If you think you're paying too much now, Just wait 'til I get through with it...

"I will not stand for anything, that's crooked or unfair, I'm strictly on the up and up, So everyone beware, If anyone's caught taking graft, And I don't get my share ....." a gun is heard going off.

More seriously, the MPs scandal has uncovered two serious problems at the heart of the way we have been governed.

Firstly, our MPs, who set our taxes, are not paying the same taxes we are. We buy everything they need from furniture to maintenance, so we pay their VAT. We pay their travel expenses, so they are not hit by fuel duties. We pay their stamp duty.

Secondly, this fiasco illustrates how our money is fire-hosed around government, public sector and the UK's 1,100 quangos (busybody groups). No wonder credit ratings agencies are threatening to downgrade the UK.

The MPs whinge how their pay has been left behind that of GPs and head teachers. Whose fault is that? They are the ones who awarded those pay scales. And after years of hearing that MPs are not in it for the money, it cracks me up to hear that more than 100 are planning to stand down, because their expenses have been rumbled.

As for the hysterics from Tory Nadine Dorries that some parliamentarians are suicidal. We know they're stupid, but spineless too? Thank God Hitler isn't camped at Calais.

MPs should be paid a fully taxed salary like the rest of us. Then they might think twice before putting up our taxes. We may need to have different bands for those who live furthest from Westminster.

And they're right. The public may not think they're worth the £104,000 their current package is costing.

But at least we could see precisely what we're paying them

Government inspectors

Were you convinced by the Prime Minister's statement that certain MPs had behaved unacceptably, but had broken neither rules nor the law?

Me neither. And I won't be, until I hear it from tax inspectors after full HMRC investigations.

As for the next Speaker, the smart money is on Frank Field, and a fine Speaker I'm sure he would make. But my first choice would be Tony Wright, that fair-minded chairman of the Public Administration Select Committee, who did so much to help victims of the pensions scandal.