§ Mrs. Beckett
To ask the Chancellor of the Exchequer what is the cost to his Department in mortgage tax relief of(a) a 1 per cent. increase in mortgage lending rates, (b) the cumulative cost since mortgage rates began to rise in June 1988, up to the end of 1989–90 and (c) the estimated cost in 1990–91.
§ Mr. Maples
An increase of 1 percentage point in the current level of mortgage interest rates would increase the annual cost of mortgage interest relief by about £550 million. The estimated additional cost of mortgage interest relief, resulting from the increases in mortgage rates above their 10 per cent. level of June 1988, was £2.8 billion up to the end of 1989–90. The cost will to a large extent have been offset by an increase in the tax yield on interest from deposits. The cost of relief in 1990–91 is estimated to be about £8 billion, taking the conventional assumption that interest rates remain at their current levels.