We have had a long and interesting debate on this subject of the appropriate rent relief to be allowed people against their income tax liability in view of the fact that people who are buying their own houses can receive rent relief on interest payments whereas people living in rented accommodation can get no relief whatever in this regard.
As I said before, my party believe that we should aim ultimately at having a comprehensive system of tax relief for rent payments available to everybody to remove the present distortion in the tax code against renting accommodation. We also believe that this would help a group who, generally speaking, have a lower income and are in a less fortunate position in relation to housing than those living in their own houses. I refer to people who are tenants.
Deputy Gregory introduced an amendment originally to the Finance Bill, which would have extended this idea of income tax relief on rent to about 53 per cent of the total tax paying public by extending it to people with taxable incomes of less than £4,500. I stated during the course of the debate on that amendment that my party were in favour in principle of doing something to help the lower income group but we felt, in terms of the cost of the amendment and also because it was helping more than half of the tax paying public if they were in rented accommodation, that Deputy Gregory's amendment was going further than we could afford to go and, perhaps it would be desirable to go at this time. We considered the matter carefully in the meantime and we have come to the conclusion that the appropriate relief, which would give practical expression to the principle which is accepted by all sides of the House that the low income groups should receive some relief on their income tax in regard to rent, is to propose a relief which is certainly very modest but which would extend solely to those with taxable incomes of less than £1,000. This relief would extend to approximately the 10 per cent lowest paid of all income tax payers. The cost would be nil this year, about £3.5 million in 1983 rising to a full cost probably in 1984 of around £5.5 million.
I believe this is a modest amendment designed to help exclusively the low income group and in particular that segment of that group who are living in rented accommodation and whose situation, in addition to income consideration, is diminished because they do not live in their own houses but are living in insecure accommodation. I believe, while the proposal costs some money, it must be stressed that it will not cost anything at all this year and, therefore, does not affect the current budget deficit by one penny. It will cost something next year but we have the time to make provision for it between now and next year. I believe, because it is confined to the low income group and confined to the lowest 10 per cent of all income tax payers, that it is a proposal which is very selective in the way in which it will operate and represents a concession in principle to the idea of assistance to the lower paid in this matter.
Obviously I do not rule out the possible extension of this concession in future years. That will depend on available finances in future years. This proposal is a modest one which will not cost anything this year, will cost £3.3 million next year, will help the low paid and is consistent with the policy my party sought to implement in Government of extending income tax rents relief.
