§ Lord VAIZEYasked Her Majesty's Government:
Whether they will list the loss of tax revenue in granting interest tax relief on 1. building society mortgages; 2. bank loans for the purchase or improvement of a residence or other property and 3. relief for bank loans other than for house purchase, for 1945, 1950, 1960, 1970, and each subsequent year and whether they will also present the loss of revenue as between standard rate and higher rate taxpayers for each of the years.
§ Baroness BIRKThe available information relates to the total relief in respect of mortgage interest. I regret that a breakdown between the relief for building society mortgages and for bank loans could not be prepared without undue expenditure of time and resources; and that no information is available centrally with which to distinguish relief for qualifying interest on bank loans other than for house purchase.
Financial year Estimated cost of Mortgage Interest Relief (£m) Estimated yield if relief restricted to basic rate (£m) 1945/46 10 Not available 1950/51 15 1960/61 70 1970/71 285 1971/72 310 1972/73 365 1973/74 510 25 1974/75 695 40 1975/76 865 80 1976/77 1,090 120 1977/78 1,040 100 1978/79 1,110 115
§ Lord VAIZEYasked Her Majesty's Government:
Whether they will list the loss of revenue in granting tax relief for 1. exemption of interest from savings bank 1730WA accounts; 2. exemption of interest or capital accretion of national savings certificates and 3. exemption of interest and capital accretion of SAYE scheme, for 1945, 1950, 1960, 1970 and all subsequent years and whether they will also present the loss in revenue as between standard and higher rate taxpayers for each of these years.
§ Baroness BIRKI regret that information is not available for the whole of the period specified and that there is no reliable information on which to apportion the estimates between basic and higher rate taxpayers. The available information, which is particularly tentative and subject to a wide margin of error, is as follows:
Cost of Exemption (£m) Financial year Interest on certain Savings Banks accounts Interest or capital accretion of National Savings Certificates Interest and capital accretion of SAYE 1970/71 16 1971/72 40 1972/73 1973/74 1974/75 30 55 1975/76 35 1976/77 36 1977/78 40 60 7 1978/79 45 70 7
§ Lord VAIZEYasked Her Majesty's Government:
Whether they will list the loss of revenue in granting tax relief for (1) the employee's contributions to approved pension schemes; (2) the employer's contributions to approved pension schemes; (3) the exemption of income and capital gains of approved pension schemes; (4) the relief for the provision of retirement annuities for the self-employed and (5) the payment of life assurance premiums, for 1945, 1950, 1960, 1970 and all subsequent years and whether they will also present the loss in revenue as between standard rate and higher rate taxpayers for each of these years.
§ Baroness BIRKI regret that information for 1945, 1950 and 1960 is not available nor has it been possible to estimate the loss of revenue from the exemption of the capital gains of approved pension 1731WA schemes. The loss of revenue from granting income tax relief for such schemes has been calculated on the basis set out in the Inland Revenue's note of February 1978 to the General Sub-Committee of the Expenditure Committee of the House of Commons (Second Report 1977–78, Appendix 15) and used in Table 16 of the recently published Public Expenditure White Paper (The Government's Expenditure Plans 1979–80 to 1982–83, Cmnd. 7439). The figures, shown in the first column of the table below, include the cost of relief for employees' contributions and the cost of exempting the income of pension funds, but exclude the cost of the relief for employers' contributions, on the footing that this is in general a proper deduction from trading profits, as part of the employer's labour costs. If however these contributions were not deductible in calculating profits, the extra tax estimated to be payable by employers is shown in the second column. I regret that it has not been possible to allocate the revenue loss between basic rate and higher rate taxpayers. All the figures are subject to wide margins of error. The calculations assume that there would be no change in the existing level of pension provision, despite the large amounts of additional liability to tax:
Loss of revenue in granting tax relief for Approved Pension Schemes £m Employers' Contributions to approved pension schemes £m Provision of retirement annuities for the self-employed £m Payment of life assurance premiums £m 1970–71 150 250 10 110 1971–72 170 350 10 120 1972–73 200 400 15 130 1973–74 270 450 30 140 1974–75 320 550 40 155 1975–76 400 600 50 190 1976–77 440 650 60 225 1977–78 430 750 65 240 1978–79 450 900 70 260