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Mortgage Interest Payments

Part of Orders of the Day — Finance Bill – in the House of Commons at 6:45 pm on 15th July 1997.

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Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Trade and Industry) 6:45 pm, 15th July 1997

There is a huge distinction, to which I was about to refer. The difference is that interest rates were on their way down when the Conservative Government took that decision. Sadly, they are now on their way up. That is one reason why we are seeking to impose on the Government the restrictions that are set out in the amendment. If, as the Chancellor and the Financial Secretary have suggested, this is a people's Budget, we must ask why the people will pay for it.

I started my speech from an historical perspective, to which I shall now return. I cannot better the conclusion reached by the Council of Mortgage Lenders in its recent comprehensive briefing. It said that it is clear that mortgage interest tax relief has moved from being a highly regressive form of relief which benefited high income home owners most to being a relatively progressive form of relief giving most assistance to home owners with a relatively small mortgage and on lower incomes. I point out that a series of Conservative Chancellors introduced changes and continued to maintain the £30,000 restriction which, together with other measures such as the right to buy, brought about that social revolution. The Conservatives can reasonably claim to have pioneered the encouragement of home ownership from the 1960s.

The Council of Mortgage Lenders gives a further analysis of the pattern of mortgage lending now—and not as it would have been in the 197,0s under Governments of both colours. It examines the size of income of the mortgagor—the person who borrows; as I am not a lawyer, I tend to get it wrong if I do not think about it—and the average size of the mortgage based on the latest convenient revenue figures for 1994–95.