§ 30. Mr. J. WALLACEasked the Chancellor of the Exchequer whether he is aware that the Public Works Loan Board declines to revise its interest rates on loans issued to small burghs in Fife-shire or to permit those burghs to repay loans at earlier dates than those originally arranged unless a premium is paid; and whether, in view of the low rate of interest now prevailing on Government stocks, he will direct the Public Works Loan Board to reconsider their attitude?
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha)I think my hon. Friend has failed to notice that advances by the Public Works Loan Board to local authorities are long-term loans. It is for this reason that premature repayment of such advances can be permitted only subject to a premium. In these circumstances the answer to the last part of the question must be in the negative.
§ Mr. WALLACEIs the hon. Member aware that on an application being made to the Public Works Loan Board for consideration under the terms mentioned in the question the Board referred the applicants to the Treasury as being the only authority that can at the present time give them relief from the higher rates of interest?
§ Mr. HORE-BELISHAI think my hon. Friend appreciates that the Government's liability to pay interest on local loan stock is a continuing one and is not affected by the current rate of interest on gilt-edged securities. The Government have to meet their interest and cannot make concessions to local authorities, otherwise, they could not provide the funds wherewith to meet the interest.
§ Mr. MORGAN JONESWill not the Treasury reconsider this matter, having regard to the incidence of these loans upon the distressed areas, including areas in Scotland, England and Wales?
§ Mr. HORE-BELISHAI thought I had made it plain that the interest can only be reduced by asking the taxpayer to make a direct subsidy.