(by Private Notice) asked the Chancellor of the exchequer what is the position pending the passing of the Finance Act as regards the deduction of Income Tax from mortgage interest and ground rents, and from dividends and interest of British companies, or of Dominion and foreign companies paid through agents in this country?

The increase in the standard rate of tax, although applying to the whole Income Tax year, will not become legally operative until the date of the passing of the Finance Act. Strictly, therefore, tax will continue to be deductible by reference to the rate of 4s. 6d. in the pound until that date. In order, however, to reduce as far as possible the necessity for subsequent adjustment, it may be found convenient, in the case of payments to be made between now and the date on which the Finance Bill becomes law, to arrange for deduction by reference to the increased rate of 5s. in the pound; but this is, of course, a matter between the payer and the recipient. The terms of the Finance Bill will, in any case, be such as to secure that, in cases where deduction of tax has been made, before the passing of the Act, by reference to the increased rate of 5s. in the pound, such deduction will, after the passing of the Act, automatically become a legal deduction as from the date on which it was made. In, view of the fact that the increased rate of 5s. is to apply for the whole year, adjustments will be necessary to make good under-deductions of tax in respect of payments made at any time before the passing of the new Finance Act, and the Finance Bill will contain provisions relating to these adjustments. I may, however, point out that, as regards dividends of British companies (other than dividends payable on preferred shares at a fixed gross rate per cent.), no question of any adjustment need arise. Under the existing law, the net amount of any such dividend will be taken for all Income Tax purposes to represent income of such an amount as, after deduction of tax by reference to the increased rate of 5s., is equal to the net amount paid.

Do the Government contemplate any extraordinary measures in order to deal with the position of small property owners who, in view of the reduction of their incomes, will be unable to pay their mortgages? Is it contemplated that a moratorium will be given, Or that any special step will be taken?

Questions of high policy respecting moratoria had better he put on the Paper.

As this matter is very complicated, may I ask the Financial Secretary to the Treasury if the banking authorities have been consulted in regard to it, since it affects them very much as mortgage holders?

We have done our utmost to see that all interests concerned should he taken into consideration.

The Minister has indicated the position of the Income Tax payer. I would like to ask him what is the position of the unemployed, who at the moment are going to be asked to accept a cut, and they are on starvation wages now?

That does not arise.

On a point of Order. My point of Order is that my question is relevant because the Minister has indicated the part that is going to be played by the Government towards the Income Tax payer. There are other individuals than the Income Tax payer who are going to be cut. There are individuals who have no income that can pay tax, and they are going to be cut. I want them to have consideration at the hands of the government.

That does not arise pose in present circumstances, on this question.