HC Deb 10 February 1987 vol 110 cc179-80W
Sir William Clark

asked the Chancellor of the Exchequer what would be the cost to the Exchequer if mortgage interest relief was increased to £31,000, £32,000 and £35,000 respectively.

Mr. Norman Lamont

Assuming no consequential changes to the distribution of mortgages outstanding, the direct revenue cost, in a full year at 1986–87 levels, of an increase in the ceiling for mortgage interest relief is estimated to be:

Ceiling£ Cost£ million
31,000 25
32,000 45
35,000 100

The cost of an increase in the ceiling at 1987–88 levels would probably be significantly higher than the estimates

mid-year 1979 mid-year 1985
Headcount Full-time Equivalent Headcount Full-time Equivalent
Civil Service1 731 716 600 588
HM Forces2 314 314 326 326
National Health Service3 1,152 975 1,223 1,026
Local Authorities 2,997 2,368 2,958 2,325
Nationalised Industries 1,849 1,818 1,137 1,124
1 Excludes Civil Servants employed outside the United Kingdom and also excludes the Northern Ireland Civil Service.
2 Excludes local engaged personnel abroad.
3 1979 full-time equivalent figure relates to 30 September.

Sources: Treasury statistics of Civil Service manpower; 'Employment in the public and private sectors, 1980 to 1986' Economic Trends, December 1986.

Mr. Brooke

According to the latest information available, the figures for excise duty and VAT on 20 cigarettes in the most popular price category in the EC member states are as set out in the table:

above, both because the number of new home loans over £30,000 has been increasing recently and because an increase in the ceiling might stimulate additional borrowing. The cost for 1987–88 will also depend on the level of interest rates in that year as well as on the 1987–88 income tax rates and bands.