§ 85. Mr. GRAHAM WHITEasked the Financial Secretary to the Treasury whether, having regard to the fact that the yield on local loan stock at current price is, approximately, 4½ per cent., he will consider the possibility of relating the present rate of interest charged on loans from this fund more closely to the conditions of long-term borrowing?
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence)The hon. Member can rest assured that this matter is under continuous consideration. Though it is obviously not practicable to follow the day to day fluctuations in the market price, the rates charged are in fact governed by the conditions of long-term borrowing. He will no doubt remember that I announced only last week a reduction of ¼per cent.
§ Mr. WHITEWill the hon. Gentleman not review the statutory conditions to see if some greater flexibility cannot be introduced into them, so that small authorities who borrow from this fund may be able to avail themselves of the opportunities afforded on the money market, on the same terms as the larger corporations?
§ Mr. PETHICK-LAWRENCEI do not think that there is any failure of flexibility in these conditions. When the market rate went down a few days ago, I was able to announce a drop of ¼ per cent. in this rate, and, if and when the conditions change so that a further reduction becomes available, I shall make it without delay.