HC Deb 30 May 1946 vol 423 cc1349-50
66. Mr. Mallalieu

asked the Chancellor of the Exchequer when he expects to be able to reduce the rates of interest charged to local authorities for loans from the Local Loans Fund.

Mr. Dalton

I propose to make substantial reductions forthwith. For loans advanced from the Fund to local authorities on and after the 1st June, 1946, the rates will be:

Loans for less than 5 years, 1½ per cent.

Loans for more than 5, but less than 15, years, 2 per cent.

Loans for more than 15 years, 1½ per cent.

These are lower rates of interest than have ever been granted before to local authorities for housing schemes. I do not propose to ask for any immediate reduction of housing subsidies, but the reduction of interest rates will, of course, be taken into account when we review the subsidies at the end of this year.

Mr. McEntee

Can my right hon. Friend say whether local authorities will be permitted to choose the period of their loans?

Mr. Dalton

No, Sir. If they are borrowing for long term purposes, for instance, for the construction of houses, it would be inappropriate finance that they should borrow for only five years. I think they ought to be very satisfied with what I have said, because they will now have to pay only 2½ per cent, for long term loans.

Mr. Oliver Stanley

Can the right hon. Gentleman say whether the rates involve any element of subsidy from the Treasury, or are they rates at which the Treasury can borrow from the public?

Mr. Dalton

They are rates at which we can borrow and cover our costs.