The Mortgage rescue plan has been extended across England in a bid to stop thousands of homeowners from losing their homes.

Many not-for-profit housing associations will be buying homes from people struggling with their mortgages, while allowing the owners to still live in their homes.

The £200million scheme, set to help up to 6,000 homeowners who would otherwise face repossession, is just one of many other plans launched or expanded to help.

The National Housing Federation devised the program last year, and it is already in place across 80 local authorities in England, but will spread across the country on Friday.

Wales, Scotland and Northern Ireland either have, or soon will have, their own schemes in place.

According to the plan, the housing associations will buy homes after the market price at an independently assessed market price.

Successful applicants have the right to remain in their homes as tenants on affordable rent, or owners after receiving a loan from a housing association. It aims that once the economy is stable again, the homeowner can pay back part, or all, of the loan.

The scheme targets families, especially those with small children, disabled households, pensioners and other “vulnerable” homeowners.

If an owner wants help, they have to apply to their local authority and will have their finances assessed by an agency. The property will be valued and the housing appreciation will buy it.

National Housing Federation chief executive David Orr says the scheme aims to give thousands of families long-term stability. It will also undermine “shadowy companies currently making money out of other people’s misfortunes”, those that offer to buy properties below market value and promise owners they can have a tenancy agreement, only to change the terms of the contract.

Housing minister Margaret Beckett said that the priority was to help people remain in their homes.
“We know that some families are worried about their mortgage payments right now, and we are determined to do everything possible to ensure repossession is always a last resort.”

Both the government and lenders have been pressured to offer help to homeowners that have been badly hit during the economic crisis and risk repossession.

The government has expanded its Income Support for Mortgage Interest (ISMI) so that homeowners that lose their jobs only have to wait 13 weeks, as opposed to the original 39 weeks, after they lose their jobs before they can claim financial help with the interest payments on their mortgage.

The Homeowner Mortgage Support Scheme will be put in place, and will allow households whose income unexpectedly falls suddenly, to defer part of their payments for as long as two years.

The Mortgage Pre-Action Protocol means lenders will be legally obliged to use repossession as a very last resort after looking at all other alternatives with the borrower, including reducing monthly payments.

Ms Beckett said: “whatever the situation, the clear message for households struggling with their payments is to speak to their lender as soon as possible.”

The government have revealed plans to guarantee small businesses £20billion of loans.

In return for a fee, the state will insure banks against companies defaulting on loan repayments. However there are concerns that £20billion won’t be enough for all businesses to share.

Prime Minister Gordon Brown has described the measures as “real help now to deal with specific problems”.

On the other hand, shadow secretary of state for business, Alan Duncan has claimed the move is “too little, too late, too complicated…a small bandage on a massive wound.”

The focus of the plan is a £10billion Working Capital Scheme created to help banks lend capital to small businesses. The government will also guarantee 50% of £20billion short-term loans to businesses who turn over up to £500million.

Lord Mandelson said: “The £10billion injection to banks represents a guarantee to enable them to free up working capital to sustain existing loans and create new ones.
“A condition of [banks] getting the money will be that they negotiate with the government on what capital will be freed up.” He added that some capital freed would be used for new lending.

He admitted that there would be some defaulting on loans, £225million has therefore been set aside to cover repayments that people can’t make.

An Enterprise Guarantee Scheme is also being set up, which will secure up to £1.3billion in additional bank loans to companies that turnover up to £25million.

This means companies will be able to borrow up to £1million 75% of which is guaranteed by the government. The money can be used for working capital eg paying wages, or new investments.

Finally, a £75million Capital for Enterprise Fund specifically for businesses with high levels of debt that have “exhausted traditional forms of financing” has been set up. £50million of this is provided by the government and £25million by major banks.

It is said the government is in discussions with credit insurance providers to provide similar guarantees on money small businesses owe their suppliers. British Chamber of Commerce director-general David Frost said: “businesses are critically in need of cash-flow. Any move to get banks lending again will be seen as good news at this bleak time. A government promise to guarantee individual loans to businesses is not only sensible, it’s crucial.”

Many believe £20billion will not be enough to solve the problem completely, with the Conservatives saying a figure more like £50billion would be more help.

George Osborne said the government was offering a shadow of the scheme the Tories came up with weeks ago, saying: “Let us hope that they will properly implement this Conservative policy rather than a pale imitation, or else they run the risk of repeating the mistakes of their expensive temporary VAT cut and achieving nothing.”

Vince Cable of the Liberal Democrats said: “the government should stop messing around with stunts and wheezes and ensure that the banks owned or part-owned by taxpayers operate as state banks maintaining lending for the economy.”

Famous entertainment retailer HMV has said it is going to buy 14 Zavvi stores, funded by selling new shares.

HMV are also looking to take out a stake in the live music market in the form of helping to run 11 venues including Hammersmith Apollo, with its 5,100 capacity. The Apollo would become the HMV Apollo in a naming rights deal.

HMV is also seems to be one of the few stores not suffering too much so far in the economic downturn. In the five weeks leading up to January 3rd, their sales were up by 2.9%.

The Zavvi stores that HMV are planning to buy are all prime location, profit making stores in areas where HMV do not currently own a store.

Nine of the stores are in the UK and two in the Irish Republic. Administrators in charge of Zavvi say that the deal would save 269 jobs.

HMV expects the purchase to cost £2 million including the cost of re-fitting and re-branding the stores.

Zavvi went into administration shortly after its main suppliers, Woolworth’s unit Entertainment UK, went into administration in November. Since this, Zavvi have had problems sourcing stock and have been forced to enter new trading arrangements.

On Wednesday, Zavvi announced it was to close a further 18 stores, resulting in 353 job losses. But the remaining 74 Zavvi stores will remain open and the administrator is hoping to sell the business.

HMV will form a new business deal with MAMA as part of its live music deal. MAMA currently deals with ownership and operation of the venues, including The Forum in London’s Kentish Town, the Birmingham Institute and Moshula in Aberdeen.

Between July 2007 and 2008, the 11 venues attracted a couple of million visitors, and had combined revenue of £20.25 million, making a profit of £2.24 million.

HMV are also going to set up a division to sell tickets for events for the venues.

Simon Fox, chief executive, said the deal was about more than just rebranding some of the venues.
“Music is very much part of our DNA, and by extending the HMV brand into the growing live music and entertainment market, our customers will be able as never before to access and experience music in all of its forms via HMV.”

One of the incentives HMV are planning on using is that loyalty card holders will be able to earn tickets to gigs as rewards.

MAMA is hoping that HMV will “alter the face of the live venue business in the UK.”
They added that: “the engagement of artist and fan is the key driver of the music industry and that engagement is at tis most evident at live music events.”

It also aims that joining with HMV will link tickets, music and merchandise. It said “a direct artist-to-fan relationship is a way to help the music industry grow and prosper.”

According to the official pension scheme safety net, the collective deficit of the UK’s final salary pension schemes hit £195 billion in December 2008.

Figures released by the PPF (Pension Protection Fund) shows that deficit rose by 43% after it hit its previous record of £136 billion in November last year. This compared to figures just one year ago, whereby the 7,800 mainly private sector schemes measured by the PPF had nearly £12 billion surplus.

The rise in the cost of paying pensions in December far outweighed the value that scheme assets rose by.

The PPF have said that: “During the month of December 2008 there was a 3.6% increase in assets due to rising UK and global equities.
“Meanwhile, lower gilt yields in general led to an increase in liabilities of approximately 10%”

Funding for the pension schemes is extremely fickle, shown by the fact that only 11% of schemes (a total of 823 schemes) were surplus last month, when as recently as March last year 3,000 schemes had been in surplus.

The dramatic difference in numbers has been mainly attributed to the international credit crunch, worldwide economic slowdown and the slump of share prices that has inevitably fallen alongside this.

On top of all these things, there has been a poorer return on bonds, which are used to work out the value of the assets that the pension scheme need to be able to pay pensions in the future.

The PPF also said that: “Over the year to December 2008, the FTSE All Share Index fell by 32.8% and 10-year gilt yields were down by 116 basis points.”

All this means that UK employers have yet one more financial problem on their plates to worry about as the economy goes into a recession.

Whenever a scheme that has been revalued and revealed to be in deficit by its actuaries, the employer must put a plan in place in order to restock the fund with  extra payments and usually bring it back to surplus within a decade.

However, last month the PPF and the Pensions Regulator warned that the final salary scheme was becoming more and more risky. One of the things they pointed out was the declining value of scheme assets, and also the rising possibilities that more firms will go into administration, and eventually going bust next year, which would leave a huge hole in their pensions funds.

Woolworths pension scheme became one of the biggest calls yet on the PPF last December, when the chain of stores closed, and the company’s pension scheme was £147 million in deficit.

In an attempt to help stop the increase in unemployment, Gordon Brown has promised to help half a million people back into work or training.

According to Mr Brown, employers will be given £2,500 for every person they train who has been unemployed for the past six months. He also promised that communities would not be forgotten. Though with 1.8 million people currently looking for work, the Tories are saying the governments job package doesn’t go far enough.

The Prime Minister set out his plans at the Science Museum in London, to prepare Britain sectors such as environmental technology, advanced manufacturing, education and healthcare.

In his speech, he said: “Failure to act now and to do so in coordination with our international partners would mean a deeper and longer global recession.
“It would mean temporary rises in unemployment becoming permanent. It would mean as in the past whole communities written off, and that would mean lasting damage to our economy and a bigger bill to pay in the future. And this will not happen on my watch.
“We cannot always prevent people losing their jobs but we can help people finding their next jobs.”

His audience consisted of some who had been unemployed for three months or more, were told they would get help, including ‘extensive’ job interview training, and would have to sign on weekly for benefit payments.

The scheme has been set up primarily to help those who have been unemployed for six months or more. The Work and Pensions Secretary said: “What we have learned from previous recessions is we need to make sure people don’t feel out of touch with the labour market…
“We don’t want to waste a generation of people, as has happened in the past.”

 A five-point plan has been created by the Federation of Small Business, to form up to 400,000 new jobs. Some of the measures it is asking for include the promotion of part-time working, simplified regulation and lower taxes. Other requests include an investment in apprenticeships and more opportunity for small businesses to bid for government contracts.

Union leaders present at the summit will ask for more job creation programmes, on the other hand, environmental campaigners will want a higher investment in energy efficiency.

Unite’s joint general secretary, Derek Simpson, has welcomed attempts to create new jobs, but has said there needs to be more focus on protecting existing jobs, especially in car manufacturing.

He said: “The businesses are basically sound. It’s a question that they have a cash-flow problem.
“Commercial loans are difficult or more difficult through banks who don’t appear to be passing on the advantage the government has given them.
“And the government needs to step in to ensure that these particularly skilled jobs are not lost because once lost they’ll never return.”

The Conservative party are criticising the governments plan as having no substance, claiming they are trying to cover up the fact that the recession policies aren’t working.

The Bank of England has cut its interest rates to their lowest in its 315 year history, to just 1.5% to try and help the economy.

The rates are now below 2%, their lowest since the Bank of England was founded in 1694, though some are saying that more dramatic changes should have been made in the fourth cut since October last year.

The Bank of England has said: ‘contraction in business activity has increased during the fourth quarter of 2008, and that output is likely to continue to fall sharply during the first part of this year.
‘Surveys of retailers and reports from the Bank’s regional agents imply that consumer spending has weakened.’

The BBC economics editor has surmised that the Bank is now being more cautious after steep cuts in the final months of 2008. He said: ‘There is a hint in its statement that it may sit tight for a while to assess the impact of the big reductions over the last couple of months.’

Senior economist from Ernst & Young Item Club agrees that the cut is appropriate, but says more must still be done.
‘With survey data continuing to languish at record lows – manufacturing and services surveys in the past few days have confirmed that activity is falling sharply – we see no reason for the Bank to hold back in cutting interest rates to 1% or below in the coming months.’

Most customers with tracker mortgage deals will probably have the cut automatically passed on to them by their bank/building society.

People with an average £150,000 mortgage repayment will probably see their monthly bill drop by £46. However, those with standard variable deals must wait to hear from their lender whether the cuts will be passed on.

Lloyds, HSBC, HBOS, Nationwide and Skipton Building Society have already said they will pass on at least some of the reduction, but most banks are saying their rates are being reviewed.

Following the rate cut, the pound rose in comparison with the euro, before slipping back again slightly to 1.1077 euros, probably due to the bank deciding to only cut rates by 0.5%, as opposed to the expected 1%.

The cut comes in the midst of many struggling companies coming to light.

Among them, Nissan announced the cut of 1.200 jobs on Thursday, and Zavvi have gone into administration, closing 22 stores. Not to mention the recent closure of Woolworths, and M&S closing 27 of its stores across the UK.

The Treasury are denying any current plans to inject more money into banks via quantitative easing, though are not ruling it out.

Some newspapers are claiming quantitative easing is being considered once interest rates fall closer to zero in order to avoid deflation.

Graeme Leach, chief economist for the Institute of Directors has said the MPC’s apparent caution in not presently cutting rates any further ‘highlights the uncertainty over what effect the existing monetary and fiscal stimulus will have on the economy.’

Only a day after the final Woolworths stores closed down, Marks & Spencer have announced the closure of 25 of its Simply Food stores, and 2 regular M&S shops.

The closures will directly lead to 780 job losses, but the company also plans to cut 450 head office jobs on top of this.

M&S’ like-for-like sales fell 7.1% in the 13 weeks leading up to 27th December, and total UK sales fell by 3.4%, and it warned its profits may be lower this year due to reductions, especially in food.

Other High Street names feeling the heat are:
- Next, who suffered a 7% drop in sales in the six months leading up to Christmas.
- Debenhams, whose like-for-like sales fell 3.3% in the last twelve weeks.
- Blacks Leisure who recorded 3.9% decrease in like-for-like sales in thirteen weeks until January 8th.
Overall, M&S group sales fell by 1.2%, even though its international sales rose by 26.9%, and its online sales rose by 29%.

In closing stores and introducing a redundancy programme and cutting pensions, the company hopes to reduce annual running costs by over £175 million.

Its changes to pensions include a cap on the increase of money going into pension funds by just 1% per year, which will reduce the future build-up of pensions. Staff who started work before 1996, will also find their pensions reduced if they choose to retire early.

Sir Stuart Rose, M&S boss said: ‘We are aware that the proposed changes set out above will be difficult for those members of staff impacted, but given that we expect challenging economic conditions to continue for at least the next 12 months we believe we are taking the right action to maintain the strength of our business.’

Keith Bowman of stockbrokers Hargreaves Lansdown, warned that the difficulties M&S faced couldn’t be ignored: ‘Consumers globally are in retreat, the dividend payment is still under review and the group’s expansion into small food outlets is now in tatters.’

M&S say that the 23rd December was its record day for food sales, with sales of over £50 million. Also, it claimed that the clothing had done particularly well in sales of lingerie and children’s clothing.

Sir Stuart also says there are plenty of customers coming into the store, with 56 million walking through the doors in the 10 days leading up to Christmas.
He said that: ‘The volumes that we sold were greater than last year and the traffic we had in our stores was as much as last year. We’re just finding that customers individually didn’t have as much to spend.’

Though John Stevenson of the KBC said that the ‘cost initiatives are to be applauded,’ analysts are still predicting a fall in the company’s profits.
Mr Stevenson also predicts M&S profits to fall £595 million from last year’s £1 billion: ‘With the pressure on gross margin we’ve got, and given the sales outlook, we still expect profits to be falling next year.’

As the final 200 Woolworths UK stores closed their doors for good yesterday, it was an emotional farewell for many customers and over 27,000 employees.

Woolworths formally held 807 stores that have been closing in stages since the end of December. Tuesday was the final day for the remaining 200 stores to shut up shop forever.

After mounting debts of £385 million, Woolworths was put into administration in November. However, with such a large debt to be paid, the administration company Deloitte was unable to find a buyer.

Deloitte is currently continuing its negotiations to sell of individual sites to other High Street chains, and many of the prime location sites are expected to re-open.

Shopworkers’ Union, Usdaw, is said to be contacting companies looking into buying the sites and asking them to prioritise applications from the redundant Woolworths employees in order to maximise their chances of employment.

John Harnnett, General Secretary of Usdaw said: ‘The union will also be in contact with local colleges, which will be offering free Skills for Life Training.
‘We will be providing as much support as necessary and would recommend all Woolworths staff to use JobCentre Plus and Next Steps to find alternative employment.’

In its final days, the stores were not only selling off their stock, but also fixtures and fittings, such as staff lockers, at discounted prices. Customers have also reported such reductions as bottled water at 4p, and DVDs and CDs for pennies.

Professor Alan Wilson from Strathclyde Business School, believes that the company didn’t survive due to its lack of quality compared to other store, and couldn’t offer the discounted prices of other stores.

One shopper from Staffordshire said: ‘It is so sad to see the shop like this.
‘Woolworths used to be the heart of Lichfield. It used to be the heart of every high street.
‘We are all happy while we are getting the bargains but we won’t be so pleased when all the other shops are wiped out too.’

Deloitte wouldn’t confirm how much money had been raised by the clearance sales, though the Glasgow Argyll Street store was forced to shut at midday yesterday as the manager said there was nothing left to sell.

One customer reported that: ‘People in there are fighting to get at empty shelves, there is nothing left.
‘I’ve been shopping at Woolies all my life. I remember going to the pick and mix when I was a girl and lately I would buy clothes for my grandchildren.
‘There was always a bargain to be had at Woolies, I just don’t understand where it all went wrong.’

Woolworths is just the highest profiled of many High Street casualties that have been caught out by the recent economic problems. Its problems were heightened when it was forced to pay in cash for goods bought from suppliers due to trade credit insurers no longer covering its suppliers.

ABTA, representative of travel agents and tour operators have said that the current weakness of the pound is likely to affect holiday destinations in 2009, after the sterling fell more than 30% against the euro and US dollar last year.

The likes of Egypt and Turkey are reducing their living costs and are therefore likely to benefit from the collapse after they saw an increase of more than 30% of UK visitors last year. Other countries that are predicted to do well are the likes of Mexico, Dubai, Australia and Cuba.

In Europe, Spain is currently the most chosen holiday destination by tourists from the UK, with over 12 million choosing to take their holidays there every year.

France comes in second most popular among us British tourists, with around 7 million of us travelling there every year.

More than 2 million of us travel to the likes of Italy and the US; and approximately 1.3 million of us currently holiday in Turkey.

ABTA spokesperson Frances Tuke has said: ‘Last year saw an increase in visitors to Turkey by 32% and visitors to Egypt up by 38%.
‘We think those will be the two biggest winners in 2009.’

Travel editor for the Independent  newspaper, Simon Calder, has said he believes tourists who travel to Spain and similar countries who have also adopted the Euro will be looking to make economies. He said: ‘People will be indulging in austerity tourism.
‘Let’s not go out for a lovely lunch in Paris, let’s wait until the weather’s a little bit warmer and go for a picnic in the Place des Vosges’

It is the Japanese yen that the pound sterling has fared worst against in the last year however, which has appreciated by about 69%.

Tourists intending to travel to some countries that still appreciate the pound have seen it rise in some places, such as a rise of over 30% compared to the Seychelles rupee, and slightly lower than 30% against the Icelandic krona.

However, Mark Thompson of the foreign currency firm Moneycorp, has warned that tourists may not in fact benefit from the change, saying that: ‘the one thing that may trip people up slightly is that you’ll find that some of the hotels won’t always price their rooms in local currencies.
‘In Mauritius, for example, they price their rooms in euros.’

The travel industry has claimed that demand for holidays for the 16 countries that have adopted the euro are unlikely to suffer a dramatic fall.
Frances Tuke of ABTA said: ’I still believe Spain will be way up there in terms of our favourite destinations.
‘A lot of people have second homes over there for instance.’

Despite predicted economic cutbacks, particularly over the festive period, the Waitrose supermarket chain has reported a 41% increase in its total sales for the week covering the Christmas trading period.

In the week beginning the 27th December 2008, takings at the chain of supermarkets hit £111.3 million, compared to their £79.2 million in the same period of 2007, despite the fact that people have been cutting back due to the economic slowdown.

John Lewis department store chain and owner of Waitrose, as said that December 23rd was the supermarkets busiest trading day ever.

John Lewis itself also saw a rise in sales during the week leading up to Christmas. Sales in the department stores are recorded to have been up 1.2% from the same week the year before, bringing in approximately £71 million.

Patrick Lewis, the firm’s department store retail director has said that: ‘the pundits who predicted it would come fast and furious in the final week were on the money.’

All 27 John Lewis stores across the UK saw an increase in the sales of clothing by a quarter during the week. Strangely though, on the other hand, sales of home goods declined by 20.5%, and sales of electrical and technology products also fell by 1.2%.

The figures that have been released for both John Lewis and Waitrose stores have included data from stores which have opened in the past year. However, no like-for-like data, which excludes new shop additions, has been released.

This news comes after Waitrose ranked number one in a customer satisfaction survey by Which? magazine this time last year, after it scored 87% in a poll of 77 firms who were rated for convenience, customer service, experience, pricing and products.

Experian, financial data providers, said on Wednesday that visits to UK High Street shops in the final week of December 2008 were up by 12.8% compared with those in the same week in 2007.