§ Mr. Roderickasked the Chancellor of the Exchequer what is his estimate of the cost to the Exchequer of exempting from tax the first £100, £300 and £500 per annum, respectively, of investment income received in each of the following forms: bank interest, building society interest, and interest on National Savings or Post Office Savings accounts.
§ Mr. NottAs regards bank interest, very approximately £75 million, £80 mil-256W lion and slightly more than £80 million respectively. I am not sure what the hon. Member has in mind as regards building society interest, as such interest is not liable in the hands of the recipients to income tax at the basic rate.
For interest on ordinary accounts with the National Savings Bank and Trustee Savings Banks the cost of increasing the exemption limit from £40 to the limits specified is about £2 million in the first case and slightly more with the higher limits.
These estimates do not take into account the effect on the distribution and volume of savings that might result from changes on the lines suggested. This effect could not be estimated.