§ Mr. Chris SmithTo ask the Chancellor of the Exchequer what would be the effect on the retail prices index of raising the ceiling on relief on mortgage interest to(a) £35,000, (b) £40,000 and (c) £45,000; and what would be the effect on the retail prices index of restricting relief in each of these cases, and in circumstances where the present ceiling is unchanged, to the standard rate of income tax.
§ Mr. Lilley[holding answer 13 March 1990]: Using the current calculations, as for the latest retail prices index, the approximate effect of raising the maximum level of mortgage to which tax relief on interest payments applies would be as follows:
Ceiling Approximate effect on "all items" RPI at January 1990 £ per cent. 35,000 -0.1 40,000 -0.2 45,000 -0.3 For the purpose of the RPI all tax relief is assumed to be at the standard rate of tax.