§ 8. Mr. Frank Allaun
asked the Chancellor of the Exchequer what is the effect per month of each 1 per cent. increase in the minimum lending rate on a mortgage of £10,000 for a buyer paying the standard rate of tax if no assistance is given by him to building societies.
§ Mr. Peter Rees
Changes in minimum lending rate have no direct effect on the mortgage rate; and the relation between a 1 per cent. rise in the mortgage rate and borrowers' net monthly payments depends on a number of factors. However, the increase from 11¾ per cent. to 15 per cent. on 1 January will add £16.37 to the net monthly payments of a basic rate tax- 596 payer with a new 25-year annuity mortgage of £10,000.
§ Mr. Allaun
Is the hon. and learned Gentleman aware that that is the answer that I worked out myself? Does he realise that such a figure puts a modest home out of reach of vast numbers of ordinary couples? What do the Government propose to do about it? Do they propose to do anything?
§ Mr. Rees
As the hon. Gentleman is so quick in his perception of my answers he will realise that the figure contained in my answer is, for the year, £49.1. I hope that that of itself will not have the effect that he has described. The hon. Gentleman and the House will appreciate that if the monetary policies of my right hon. and learned Friend are successful these matters may be resolved more easily than he expects.
§ Mr. Latham
Is my hon. and learned Friend aware that the time taken to get tax relief right is far too slow? Will he pay attention to that?
§ Mr. Rees
My hon. Friend will appreciate that it is a problem that has affected various Administrations. We have given thought to the problem. I regret that it will not be possible to recode everybody or to alter codes in the current year. However, individual taxpayers who want to be recoded may make application. Especial attention will be paid to tax repayments at the conclusion of the fiscal year.
§ Mr. Stoddart
Is the hon. and learned Gentleman not ashamed of himself? Are the Government not ashamed of themselves for imposing such a swingeing increase on ordinary working people who want only a roof over their heads? Is he aware that many young families are having to forgo having children as a result of the Government's policies? When will he do something about it?
§ Mr. Allaun
On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply beg to give notice that I intend to raise the matter on the Adjournment. The figure is not £49 but over £200.