§ 30. Sir C. Osborne
asked the Chancellor of the Exchequer what would be the approximate annual cost of freeing all building societies of Income Tax payments; and what proportion of their receipts from interest on loans for house purchase is absorbed by Income Tax.
§ The Financial Secretary to the Treasury (Mr. Anthony Barber)
It is estimated that to exempt building societies from Income Tax apart from the tax they pay in respect of share and deposit interest going to investors would cost £11 million, or about 6 per cent. of their receipts from interest on loans.
§ Sir C. Osborne
Does my hon. Friend agree that it would be better to encourage people to buy their own homes instead of encouraging them to buy second motor cars? Could not some of the taxation reliefs announced yesterday have been given to building societies so that people could buy their own homes instead of putting more motor cars on overcrowded roads?
§ Mr. Barber
As my hon Friend will I am sure remember, this matter was debated over and over again at the time of the Finance Bill, and I dealt with it only a few months ago. Even if we were to do as my hon. Friend seemed to suggest, the consequence would be no more than to reduce the rate of interest charged by building societies to borrowers by about one-quarter of 1 per cent.