§ SIR THOMAS ROE (Derby)To ask Mr. Chancellor of the Exchequer whether he is aware that it is the practice of the Public Works Loan Commissioners to refuse applications for loans from urban district councils whose districts have a rateable value exceeding £200,000, and also to limit the purposes for which loans are advanced to such councils; and whether he is prepared to advise the Lords Commissioners of His Majesty's Treasury to relax the restrictions at the present time imposed by them in this respect.
(Answered by Mr. Lloyd-George). The loans of the Public Works Loan Commissioners are restricted, as my hon. friend describes, under direction of the Treasury. The object of the restrictions is to secure that loans out of the Local Loans Fund shall, as far as possible, be made available only to those local authorities which are least able to borrow on their own account in the open market, and only for those purposes which 560 Parliament is believed to be specially desirous of encouraging. If the restrictions were removed, the effect, under present market conditions, might be that many loans of large amount would be applied for by the councils of districts of high rateable value, who are in a position to exercise their own credit; also loans for undertakings of a commercial or remunerative character, which the Local Loans Fund is not specially intended to assist. These loans could not be made except by further issues of local loans stock, depressing the price of that stock, and thereby necessitating the raising of the rates of interest for the poorer as well as for the richer borrowing authorities. So long as these conditions continue I am not prepared to relax the restrictions.