§ Mr. Frank Allaunasked the Chancellor of the Exchequer if he will seek powers to grant tax relief at the effective standard rate of approximately 30 per cent. to local authorities on interest on housing loans, this being the rate granted to owner-occupiers with mortgages; and if he will estimate the cost to the Exchequer of this step both nationally and in regard to Manchester for 1970–71.
§ Mr. Patrick JenkinThe income of local authorities is already wholly exempted from tax by Section 353 of the Income and Corporation Taxes Act, 1970.
The only tax for which they are accountable is income tax which they are required to deduct on paying interest on loans. The burden of this tax falls on 369W the recipient of the interest who can claim repayment if it is in excess of his liability.