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		Reprieve for UK mortgage industry & credit market Thursday 11 September 2003 Planned new laws which would have severely damaged the UK mortgage market and credit were rejected today in the European Parliament. The Parliament's Legal Affairs Committee voted to reject the Commission proposal for a Consumer Credit Directive which, if adopted, would have forced the whole mortgage regulatory system in the UK to be redrawn at a cost of hundreds of millions of pounds to the industry. The proposal which aims to harmonise legislation in consumer credit across Europe in areas such as car buying, credit cards, mortgages and overdrafts, could also have slashed consumer spending by £4bn within two years. An independent study by consultants OXERA found that GDP in the UK could fall by 0.2 per cent - £2bn a year - because of the drop in consumer spending. The Commission will have to rethink its plans if the vote is mirrored when the proposal is brought before the whole Parliament. Before the vote, the Commission accepted the case for change but insisted that this could be achieved in discussion after the Parliament had given it a positive opinion. Conservative East Midlands MEP, Roger Helmer, said: "These proposals would have damaged every aspect of consumer spending in the UK. One-size-fits-all rules on car purchase, mortgages, loans and credit cards are totally inappropriate for the UK market. We have asked the Commission to go back and think again. This directive must be used as a market-opening measure, which will encourage cross-border trading and innovation. Strong consumer protection in this critical area must be sustained, but at the same time UK firms should be encouraged to export their skills across the EU."