§ Mr. Austin Mitchellasked the Chancellor of the Exchequer what was the estimated cost of tax relief on mortgage interest in 1978–79; what was the average rate of interest over this period; and what is the estimated annual cost to the Exchequer of relief for every percentage increase in interest rates on the mortgages now outstanding.
§ Mr. Peter ReesThe estimated cost of mortgage interest relief for 1978–79 was about £1,110 million. The average of the rates recommended by the Building Societies Association during the financial year 1978–79 was 10 per cent. At 1979–80 income levels and tax rates, the cost of mortgage interest relief increases about £120 million, at an annual rate, for a 1 per cent. increase in interest rates.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer what would be 72W the saving to the Exchequer of a reduction in the ceiling on mortgages for the purpose of tax relief to £20,000, £15,000, £10,000 and £5,000, respectively; how many taxpayers are in each class; and what is his estimate of the taxable income of the average taxpayer in each group before payment of mortgage interest
§ Mr. Peter ReesI regret that statistics are not available in a form which would enable an estimate to be made.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer by how much the public sector borrowing requirement could be reduced if tax relief on mortgage interest were abolished.
§ Mr. Peter ReesAt 1979–80 income levels and interest rates the revenue cost of mortgage interest relief is estimated at some £1,500 million. If the tax relief were abolished the effect on the public sector borrowing requirement would be somewhat smaller.