We were dealing with amendments from Deputy Noonan and myself concerning the question of mortgage interest relief. I was explaining the thrust of my party's argument on the basis that, since there appears to be a very unfair proportion of tax paid by the PAYE sector — and that, preponderantly, since these are the same people who are adversely affected by high interest rates — it would be appropriate that the total interest relief of 100 per cent would apply to home owners in the category we are addressing here.
The function of interest rates has changed in recent times; there was a time when they were used as an instrument to control inflation but it would appear now that interest rates are used to attempt to stem the outflow of funds from the economy. Despite the level at which interest rates are pitched with the purpose of doing that, the extent of outflow of capital is still extremely worrying. The outflows, of course, are made up of a number of things, including repatriation of profits, which is a vast drain on the economy. Nonetheless, the fact remains that interest rates are exceptionally high; when we were taking this Bill last year we could instance four separate increases of 1 per cent during that year and, give or take variations since then, they remain at that level and are likely to continue to do so. Our relationship with the German economy, through the monetary system, is likely to ensure that they will stay since the German approach seems to be to tackle their particular problems exclusively on a monetary basis rather than on the basis of any fiscal changes which should be taken on board having regard to their wider responsibilities.
In those circumstances, people are being unfairly penalised in the home ownership bracket, especially new borrowers. Of course there is the additional matter of the rash of home possessions which is now under way and which has been for some time, by building societies and local authorities through the HFA system. I am not arguing that 100 per cent mortgage interest relief would prevent the level of home repossessions which, sadly, are going on at the moment, but it would certainly help a great many people who are struggling to make ends meet; it would greatly assist them if the 100 per cent mortgage interest relief was restored.
I know it can be argued that this is not a very progressive amendment against the background of our general discussion about allowances, reliefs and so on but, in the context of overall lack of reform, we are reduced to this kind of special pleading. I have attempted, in the subsequent amendment which I had intended to have taken with this as part (a) and part (b) to temper that and to try to introduce a note of progressivity to the intent behind it, inasmuch as it would be biased in favour of those on lower incomes, but I am happy to support amendment No. 3.