HC Deb 23 November 1971 vol 826 cc1113-5
4. Mr. Hardy

asked the Chancellor of the Exchequer how many persons are currently receiving tax allowance in respect of mortgages of their own residences, where such mortgages are of an amount over £10,000 and below, £25,000, or over £25,000, respectively.

Mr. Patrick Jenkin

The statistics on which to base estimates are not available, but the number in each category is small.

Mr. Hardy

Is it not disgraceful that this currently relevant information is not available? Is it not true to say that the purchasers of some of the expensive houses now changing hands will receive more in a week by way of tax relief on their mortgage interest than the tenant of the most heavily subsidised council house receives in a year? Will the Treasury reconsider this matter to make sure that while a mortgage of up to £5,000 may be properly allowed for against tax, this massive contribution to the well-heeled is reduced?

Mr. Jenkin

I disagree with almost every word of the hon. Gentleman's supplementary question. I think that when he bears in mind that only about 5 per cent. of the total sum involved in reliefs for mortgage interest goes to surtax payers he will realise that his remarks are extravagant.

Mr. Taverne

Is there not total disparity of treatment between the majority of council house tenants who do not have the advantage of acquiring a capital asset, and from whom subsidies are being withdrawn, and those who are buying their homes on a mortgage, acquiring a capital asset and being subsidised by other taxpayers?

Mr. Jenkin

It is a complete abuse of the English language to describe relief from taxation as a subsidy. Relief for any form of loan interest is justified on the ground that a man pays tax on the income from his assets, with relief for the payment in respect of his liabilities.

13. Mr. Allaun

asked the Chancellor of the Exchequer approximately what income tax and surtax relief is secured weekly by a single house purchaser with a total income of £10,000 per annum, wholly unearned, taking out a £30,000 mortgage on a house at 8 per cent. interest; how this compares with the average weekly subsidy on council houses; and if he will seek to introduce a ceiling on the size of mortgages ranking for such a subsidy.

Mr. Maurice Macmillan

The figure for which the hon. Gentleman asks depends on the term of the mortgage, and on the lapse of time since it was granted. In any case there would be no valid comparison between such a figure and the average subsidy on council houses. I have no statement to make on the last part of the Question.

Mr. Allaun

Since the Minister is reluctant to give this figure, may I give it to him? It is approximately—[HON. MEMBERS: "Question."] Is it not a tax handout of approximately £1,600 a year at the marginal rate, or £32 a week, and does not this compare rather favourably with the council tenant, who gets 90p a week on average, including the rate subsidy? Therefore, while I do not want to hit the ordinary house purchaser, should there not at least be a ceiling on the amount of his mortgage for tax relief purposes? If there is not a ceiling, or in any case, is it not utterly unfair to slash the subsidy on the council tenant and yet to allow subsidies at this level?

Mr. Macmillan

There is no question of this allowance being a subsidy. Considered at the level to which the Question is directed, it is more comparable with relief on interest payments on debt rather than with a mortgage. The figure which the hon. Gentleman quoted, of some £30-odd a week, is totally meaningless without giving any term for the mortgage. In certain circumstances, that figure could be as low as £3 a week.

Several Hon. Members

rose—

Mr. Speaker

Order. This appears to be a matter for debate rather than for question and answer. Sir Derek Walker-Smith, next Question.

Hon. Members

Oh!