§ Order read for consideration of Lords Amendment.
§ Ordered: "That the Lords Amendment be now considered."—[Mr. Peake.]
§ Lords Amendment considered accordingly.
Lords Amendment: In page 2, line 46, at end, insert new Clause A (Repayment of loans made by Public Works Loan Commissioners).
(1) Nothing in any enactment requiring that, where a sum borrowed by a local authority is repayable by instalments (whether of principal alone or of principal and interest combined), the first instalment shall be paid within a specified period from the date of borrowing shall be taken to prevent the first instalment of a sum so borrowed from the Public Works Loan Commissioners being made repayable within any longer period authorised under Section 11 of the Public Works Loans Act, 1875 (which provides for the fixing of a period not exceeding five years).
(2) Nothing in any enactment requiring that, where a sum borrowed by a local authority is repayable by such instalments, the instalments shall be equal and periodical shall be taken to prevent the Treasury from postponing, under Section 37 of the said Act, the payment of any instalment of a sum so borrowed from the said Commissioners, or to prevent the said Commissioner§ or the local authority from agreeing to the postponement on any terms authorised by the Treasury under that Section.
(3) Where, under either of the said Sections or otherwise, payment of interest on any sum borrowed by a local authority from the said Commissioners is postponed (whether the interest would, but for the postponement, have been payable separately from the principal or as part of an instalment of principal and interest combined), the Commissioners and the local authority may agree that it shall be a condition of the postponement that all or any of the interest accruing during the period of the postponement shall, at the end of that period, be added to the principal and bear interest and be repaid accordingly.
In this subsection references to postponing the payment of interest shall be construed as including references to arranging that the interval between the borrowing and the first payment of interest is longer than the interval between subsequent payments of interest, and references to the period of postponement as including references to the first mentioned interval.
§ The Financial Secretary to the Treasury (Mr. Peake)
I beg to move, "That this House doth agree with the Lords in the said Amendment."
I ought in a few words to explain the object of the new Clause. It is to bring the borrowing powers of the local authorities into line with the lending powers of the Public Works Loan Board. There may be cases particularly affecting the smaller authorities where, having borrowed under the Bill, they are carrying out development or redevelopment schemes under the Town and Country Planning Acts, and these schemes may, in the early stages, be unremunerative or unproductive of revenue. Under the new Clause it will be possible for repayments of interest and principal to be postponed with the consent of the Treasury and the Board.
§ Question put, and agreed to. [Special entry.]