HC Deb 21 February 1946 vol 419 cc1306-7
67. Mr. W. F. Neill

asked the Chancellor of the Exchequer if he is aware that building societies borrow money at 2¼ per cent. and advance to borrowers at 4 per cent., taking business risks and paying income tax for trustees and borrowers; and, as the Treasury borrow from the bank at 1 per cent., if he will consider reducing the interest of 3⅛ per cent. charged to local authorities which is secured by local rate and thereby facilitate cheaper rents for tenants.

The Chancellor of the Exchequer (Mr. Dalton)

Short-term rates are normally lower than long-term, and it is the latter which govern loans to local authorities.

Mr. Neill

Is the Minister aware that the building societies borrow on short term and lend to the borrowers on long term?

Mr. Dalton

It is a bit complicated, but the key to the answer, as I have suggested, is that the Government borrow long term at the lowest rate we can secure and relend to local authorities at substantially the same rate.

Mr. Keeling

Is the Chancellor aware that if the building societies were relieved of Income Tax as the Treasury is, they could finance building at a lower rate than the Treasury rate of 3⅛per cent.?

Mr. Dalton

I should doubt that, but if people were relieved of Income Tax they could do much better for themselves.

Mr. Tiffany

Should not the figure of 3⅛ per cent. be 3¼ per cent.?