HL Deb 02 August 1972 vol 334 cc274-7

2.26 p.m.

LORD CRAWSHAW

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they will introduce legislation to enable tenants to claim tax relief in respect of their rents in the same way as owner-occupiers may claim tax relief in respect of mortgages.

EARL JELLICOE

My Lords, in general the tax system takes no account of the many individual items of personal expenditure taxpayers may have to meet out of their income and it would not be justifiable to make rents an exception to this important principle. The tax relief given for mortgage interest is not comparable.

LORD CRAW SHAW

My Lords, while thanking my noble friend for that reply, may I ask whether he would not agree that one can very easily compare mortgage interest with rent? Would he not agree that, unless the situation is changed, the very laudable aims of the Housing Finance Bill are liable to be frustrated; and, further, that the present position acts against both parties in the rented sector, makes the position of the owner-occupier almost too enviable and is a significant factor in the inflation of house and land prices?

EARL JELLICOE

My Lords, I think there is a distinction between the two here. In the first place, there is what I would call a semi-philosophical distinction. In the tax context, mortgage interest does not represent a payment out of income but an actual transfer of income from one person to another. It is therefore right that a person who is liable for such interest should not have to pay tax on a part of income which is not his. That is a semi-philosophical difference. The practicable difference is that successive Governments have seen the relief for mortgage interest as encouraging an end which I think we all hold to be socially desirable, of home ownership.

LORD PARGITER

My Lords, is the noble Earl saying that there is a transfer of income in the case of an owner-occupier, but that there is no transfer of income between a tenant and landlord?

EARL JELLICOE

My Lords, I think what I was saying (and I had better repeat it because this is a complicated area) is that in the tax context such a transfer does not represent a payment out of income, but an actual transfer of income from one person to another.

LORD LEATHERLAND

My Lords, is the noble Earl aware that a large number of the poorest tenants do not pay income tax, and therefore would not obtain any refund or rebate under such a scheme as has been mentioned? And, if the noble Earl wishes to help the tenant, would he be good enough to postpone the increases that are provided for in the recent Act?

EARL JELLICOE

My Lords, I believe it would be a mistake, after rather long debates—I think we had nine days in Committee on the Housing Finance Bill —to restart our debate on that legislation at this particular juncture.

BARONESS GAITSKELL

My Lords, while agreeing with the idea of the noble Lord, Lord Crawshaw, may I ask the Government whether they would consider what Mr. Patrick Hutber suggested in the Sunday Telegraph, that subsidies should be given to landlords who build for rent?

EARL JELLICOE

My Lords, I am always very willing to look at a suggestion from the Sunday Telegraph, or indeed any others of our great national Sunday newspapers, some of which have an even wider circulation than the Sunday Telegraph. I am afraid that this article escaped my notice over the weekend. I will have a look at Mr. Patrick Hutber's suggestion and if I think it is worthy of passing on (as I am sure it is, since the noble Baroness has recommended it) I will do so.

LORD POPPLEWELL

My Lords, would the noble Earl agree that we are told that this Government are looking very closely into the whole tax situation? Furthermore, in view of the importance of this matter—because it is a physchological one in addition to being a financial one—would the noble Earl not close his eyes to the request made but use his good influence in seeing that this matter is adequately discussed with the Chancellor of the Exchequer, to see whether something along the lines suggested might be introduced in the anticipated new tax system?

EARL JELLICOE

My Lords, I am afraid that the noble Lord, Lord Popplewell, is under a misapprehension if he thinks my influences are necessarily good. All I would say is that I have noted what he has said and what my noble friend has said. I will bring this matter and the interest evoked in your Lordships' House to the attention of my right honourable friend. But I think it would be disingenuous of me to hold out a hope that there is likely to be a fundamental change of attitude in the policy of Her Majesty's Government in this regard. But I shall certainly see that the sentiments expressed are brought to the attention of my right honourable friend.

LORD GISBOROUGH

My Lords, would not the noble Earl agree that it is highly desirable at this time to encourage people to rent their houses, in order to take some of the steam out of the great demand for bought houses?

EARL JELLICOE

My Lords, I would not dissent from that point of view, and it was implicit in one of my noble friend's supplementaries which I failed to answer.