Mortgage Tax Relief

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To ask the Chancellor of the Exchequer, further to his reply to the hon. Member for Great Grimsby of 21 December 1989, Official Report, columns 368–69, on mortgage interest tax relief and investment income, whether he will provide for 1989–90 the numbers in each range of income with investment income of more than £200 and less than £500, and those with investment income of more than £500.

The information requested is in the table. These estimates are provisional and subject to revision.

Single People and Married Couples Receiving Mortgage Interest Relief:
Range of total income (£)	Numbers with annual investment income of
	more than £200, but less than £500	more than £500
	(thousands)	(thousands)
0–4,999	30	20
5,000–9,999	90	260
10,000–14,999	260	290
15,000–19,999	300	350
20,000–29,999	280	450
30,000 +	140	490
Total	1,100	1,860

Increase in income after tax¹ (£ per week) compared with indexation² in 1990–91 for married man³ with two children.
	Multiple of average earnings⁴
	½	¾	1	1½	2	5	10
Increased derived from
(i) 1p cut in basic rate	0·61	1·37	2·13	3·65	4·29	4·29	4·29
(ii) 7·5 per cent increase in main income tax allowances	1·59	1·59	1·59	1·59	2·54	2·54	2·54
(iii) Increase in child benefit
(a) £3·15 per week per child⁵	6·30	6·30	6·30	6·30	6·30	6·30	6·30
(b) £2·45 per week per child⁶	4·90	4·90	4·90	4·90	4·90	4·90	4·90
(iv) reduced rate band of 20 per cent, on first £1,450 of taxable income	1·40	1·40	1·40	1·40	1·40	1·40	1·40
(v) reduced rate band of 15 per cent, on first £700 of taxable income	1·35	1·35	1·35	1·35	1·35	1·35	1·35
¹ Disregarding any change to entitlement to social security income-related benefits except in item (iii) (b).
² Calculations based on the standard assumption that 1989–90 allowances and the basis rate limit have been indexed by 7·7 per cent, for 1990–91.
³ Assumed to have no reliefs and allowances other than the personal allowance and the married couple's allowance.
⁴Average earnings assumed to be £303·8 per week, an increase of 8·5 per cent, on 1989–90 in line with the assumptions used by the Government Actuary for reviewing national insurance contributions (paragraph 3·02 of the Autumn Statement 1989).
⁵ Assuming no change in income support and family credit children's rates.
⁶ Assuming corresponding changes in income support and family credit children's rates.

Volume 169: debated on Wednesday 14 March 1990