The proposal to end the £11 million tax discount for mortgage-payers was made in the Budget, which was published yesterday, and it has been criticised by one of the minister’s former colleagues from the “Angry Men” pressure group.

Treasury Minister Alan Maclean says that the tax relief is “inefficient and counter-productive” because instead of making it easier to pay a mortgage, it just inflates house prices. And he says that it’s unfair because there’s no similar discount for people who are renting and cannot afford to own their own homes.

But Broadlands Director Roger Trower – who was one of the “Angry Men” campaigners along with Senator Maclean ten years ago fighting States tax increases and waste – says that it’s the wrong thing to do.

He said: “It’s wrong, it’s not fair and they should not keep hitting the soft target of the wage earners.

“Confidence is the most important thing, when we have got it, people will do things and when we don’t, they won’t.

“They have delivered absolutely nothing. The whole idea is that they have to cut their costs. It’s just like the Angry Men thing years ago, they just cannot get it into their heads: don’t keep employing new people on £100,000 per year, and don’t keep ramping up taxes.”

Senator Maclean says that phasing out the relief is the right thing to do – and has pointed out that the UK took the step years ago, and that Guernsey has just agreed to do the same.

He said: “Mortgage Interest Tax Relief (MITR) is inefficient and counterproductive. Research – by the OECD and PwC among others – has shown that it is likely to increase housing demand, without increasing supply, and is likely to push up house prices.

“MITR only benefits taxpayers who can make the move into the property market and it is unfair to expect taxpayers who rent their homes to subsidise those who can buy.

“In common with a number of other jurisdictions, including Guernsey, the proposal is that the relief be gradually withdrawn over a decade from 2017 to ensure that existing mortgage holders and potential first time buyers will be able to plan accordingly as their earnings increase.”