HC Deb 28 March 1972 vol 834 cc213-5
8. Mr. Sydney Chapman

asked the Chancellor of the Exchequer what is his estimate of the total lax relief allowed on mortgages in the last 12 months for which figures are available.

Mr. Barber

£300 million for the financial year 1970–71.

Mr. Chapman

I thank my right hon. Friend for that reply. Does not he agree that the recent increases in house prices inevitably caused by the apparent land shortage and inflation are most disconcerting? Since my right hon. Friend has seen fit to restore tax relief on all bank loans in his Budget, is there not a case for greater consideration to giving more widespread tax relief for owner occupation, which both parties want to encourage?

Mr. Barber

I appreciate my hon. Friend's point about the increase in house prices, but, subject to further consideration, I believe that the extent of the tax relief on mortgages is about right at the present time.

Mr. J. T. Price

While the Chancellor of the Exchequer assures us constantly of his concern about rising prices and general inflation, how can any Government of whatever colour have any worthwhile economic policy while allowing the ruthless exploitation of land and property values to dominate our economic affairs? Is not it a fact that while the right hon. Gentleman may be able to point to a small alleviation in the cost of living in terms of certain consumer goods, the enormous increase in land and property values lies at the root of our economic problems? This is the real starting point of inflation. The Government are so smug and self-satisfied that they allow this exploitation of land and property to go on at the rate of 25 per cent. a year on pre-existing values. When will the right hon. Gentleman do something about that?

Mr. Barber

This Question is about tax relief on mortgages. The hon. Gentleman raises a much wider point.

Mr. Frank Allaun

In contrast with the figure of £300 million that the right hon. Gentleman has just given, is it not a fact that the Government subsidy to council tenants is only £157 million a year? I do not want to take this relief away from owner-occupiers, but is not it utterly unfair to take it away from council tenants? Is not that precisely what the Government are doing by their statement on the Housing Finance Bill that they propose to reduce by up to £200 million a year the subsidy which would have gone to council tenants under the existing system?

Mr. Barber

The proposals for housing finance are absolutely right. I disagree entirely with the hon. Member for Salford, East (Mr. Frank Allaun).

11. Mr. Hugh Jenkins

asked the Chancellor of the Exchequer if he will now seek to establish machinery for the collection of statistics on the question of the relationship between the number of houses on which tax-relieved mortgages are held and the number of persons holding such mortgages.

Mr. Maurice Macmilian

No, Sir. This could only be done at disproportionate expense.

Mr. Jenkins

It is not at all difficult to do this. The truth is that the right hon. Gentleman and his right hon. and hon. Friends do not want to know about it There are roughly 15,000 people who are getting mortgages on more than one house. Is not it the case that many friends of the right hon. Gentleman in the Conservative Party are among those who are getting relief on more than one house? It is not so much the case that the Government find it difficult to find out about it; they do not want to know. While they are refusing to know about people getting two mortgages on one horse, they are busily engaged in cutting council house subsidies. Will the right hon. Gentleman look at this again?

Mr. Macmillan

It is difficult. It means getting individual returns from building societies on each amount of interest paid or collecting the information from the taxpayer. It would mean a large amount of work in the tax districts at a time when they are already carrying a heavy burden in making the tax changes. As to those who get this relief, as the rules stood after the previous Administration altered them it was equally possible for anyone to get a second mortgage—even for such purposes as adding a wing to an existing house and at the same time buying another house on a new mortgage—and still get full relief. That is how the previous Administration left it.

Mr. Jenkins

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the right hon. Gentleman's replies, I beg to give notice that I shall seek an early opportunity to raise the matter on the Adjournment.