HC Deb 22 February 1973 vol 851 cc672-3
16. Mr. Cronin

asked the Chancellor of the Exchequer what action he is taking to reduce the inflationary effect of speculative capital expenditure.

Mr. Patrick Jenkin

Speculative gains are as much a consequence of inflation as a cause. They are but one aspect of the manifest unfairness which inflation produces.

Mr. Cronin

Is the hon. Gentleman not aware that in spite of the freeze there has been a steady escalation of housing costs, as a result of the activities of property speculators? Is it not now completely indefensible that these speculators should be actively subsidised by being allowed to set off interest on the capital borrowed against their incomes for taxation purposes? Also, is there not now a strong case for imposing penal taxation on the profits of property speculation?

Mr. Jenkin

On the first part of the hon. Gentleman's question, I can only repeat what my hon. Friend the Minister of State said a moment ago, that the relief for interest in the case of loans to buy property is on exactly the same basis. with no change at all, as applied when his own party was in office. On the other part of the hon. Gentleman's question, I am sure that he will recognise that I cannot say anything at this stage.

Mr. Body

Does my hon. Friend not agree that this is another example of the word "inflation" being improperly used, in that rising prices are not necessarily the same thing as inflation?

Mr. Jerkin

I recognise that one could get very deeply involved in academic arguments on this interesting subject, but I shall resist the temptation today.