HC Deb 12 July 1938 vol 338 cc1109-10
47. Mr. Lambert

asked the Chancellor of the Exchequer to what extent the Treasury exercises control over proposed borrowings by local authorities?

The Chancellor of the Exchequer (Sir John Simon)

Subject to minor exceptions, local authorities cannot borrow money except with the express approval of Parliament or of a Minister or Government Department acting under statutory powers. In no such case is the Treasury itself the sanctioning authority although it has certain special functions, as under Standing Orders 207 and 208, in relation to London County Council Money Bills. When a local authority has received authority for a scheme it may borrow itself from the public or if it is eligible to borrow from the Local Loans Fund and wishes to do so it may apply to the Public Works Loan Commissioners. The Treasury has certain duties in connection with the Local Loans Fund including the duty of submitting to Parliament periodically Public Works Loan Bills which settle the total amounts that the fund may lend.

Mr. Lambert

In view of the very great increase in borrowing by local authorities, would it not be wise if these regulations were tightened up?

Sir J. Simon

My right hon. Friend will recall that the Select Committee on Estimates in 1932 went into this question of the control exercised by Government Departments over borrowing by local authorities and they came to the conclusion that central control was not needed. It is not really borrowing by local authorities which is the main element in the annual capital issues in this country.

Mr. Watkins

Would the right hon. Gentleman agree that there is no evidence that local authorities abuse their present powers in this matter?

Mr. Leach

Is not the money spent by local authorities the best-spent money of all?