HC Deb 15 December 1932 vol 273 cc500-1
32. Mr. CURRY

asked the Minister of Health how much would be saved to local authorities in England and Wales if the rate of interest on all outstanding loans secured on municipal houses were reduced to 3½ per cent. per annum?

Sir H. YOUNG

Precise information is not available, but if such a course as mentioned by my hon. Friend were practicable, it appears, on a rough estimate, that the amount payable by local authorities in interest would be less by about£2½ millions. This does not include loans under the Act of 1919 in respect of which any savings would accrue to the Exchequer.

Mr. CURRY

In view of the desirability of economy, and in view also of the high rate of interest which is still being charged under the 1919 schemes, will the Minister take into consideration the advisability of reducing the rate of interest?

Sir H. YOUNG

I must point out to the hon. Member that the course suggested is hardly practicable, because, of course, the money has been borrowed by local authorities from other parties at a fixed rate of interest, which they are not at liberty to repudiate.

Mr. CURRY

Is it not a fact that a large majority of these loans are from the Public Works Loan Board?

Sir H. YOUNG

Again, the Public Works Loan Board raise this money from other sources.

Sir P. HARRIS

Would it not be possible to have a conversion loan for local authorities loans, to follow the precedent of the Government?

Sir H. YOUNG

I will call my hon. Friend's suggestion to the attention of the Chancellor of the Exchequer.

33. Mr. THORNE

asked the Minister of Health whether the Government will encourage local authorities to grant loans at a lower rate of interest under the Small Dwellings Acquisition Act and other Housing Acts; and what representations he has received from local authorities pointing out the necessity of reducing the rate of interest on loans in order that they may compete with building societies?

Sir H. YOUNG

The rate of interest chargeable on new loans granted by local authorities under the Small Dwellings Acquisition Acts was reduced from 5 per cent. to 4¼ per cent. on 8th November last. No representations of the kind suggested have been received since that date.