LETTERS TO THE EDITOR
From: Harold Lever, MP, Sarah Gainham, Enid Lakeman, Peter S. Smith, Colin Cross, Alan Lieb, Brian Crozier.
Two-tier Interest Rates
SIR,—I am glad that Nicholas Davenport continues to press for a two-tier system of interest rates in spite of the views of the financial purists. They might note, incidentally, that this system is used in the United States for a good deal of public borrowing. The Federal Exchequer subsidises state and local authorities by allowing them to issue bonds on which the interest bears no tax.
In this country we have in effect a multi-tier interest rate system in operation so far as net (i.e. actual) interest is concerned. For this depends on the tax rate of the borrower; the greater the income the lower the net rate of interest. So owner-occupiers with small incomes pay a much higher rate of interest than their better-off neighbours.
Something here for the Chancellor's springtime fancy?
HAROLD LEVER House of Commons, London, SW 1
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