He says the UK’s eight largest banks, including RBS, HBOS, Lloyds TSB, Barclays and Nationwide have agreed to take part in the scheme. The Government hopes this additional legislation will continue to sure up the ailing UK mortgage sector and will prevent a glut of repossessions to come about in 2009.
Brown told the commons: “This measure will extend protection for those in work as well as those out of work and be available at a higher level of income.
“We will make this possible by guaranteeing lenders against the risk of loss from those deferred interest payments.”
Brown revealed this after the Queen’s speech to open Parliament.
She told the House: “The strength of the financial sector is vital to the future vibrancy of the economy.
“Legislation will continue to be taken forward to ensure fairer and more secure protection for bank depositors and to improve the resilience of the financial sector.”