§ 55. Mr. Gallacherasked the Chancellor of the Exchequer if he is aware of the feeling created amongst local 1880 authorities following his decision to increase the interest rate from 2½ per cent. to 3 per cent.; and will he now reconsider this question and revert to the cheap money policy of his predecessor.
§ Sir S. CrippsI have received a number of representations, but there is nothing which I could usefully add to my reply of 20th January to the hon. Member for Mile End (Mr. Piratin).
§ Mr. GallacherIs the Chancellor aware of the fact that with houses costing £1,700, the 3 per cent. rate of interest will make it utterly impossible for local authorities to build houses, and is he further aware that he is putting millions into the pockets of the railway shareholders direct, and it is the local authorities that will have to pay, and make good that money?
§ Sir S. CrippsNo, Sir.
§ Mr. Henderson StewartWas the Chancellor aware, when he raised this figure, of the extraordinary delays now taking place in housing schemes, as a result of the Government's policy, with a consequent heavy charge upon the local authorities with no rates whatever in return; and, in view of those circumstances, ought there not at least to be some exception made?
§ Sir S. CrippsNo. All the factors were taken into account.
Mr. Norman SmithIs not my right hon. and learned Friend aware that most of this interest burden could be avoided altogether, if he would use his powers under the Bank of England Act to debar private financial institutions from creating credits out of nothing?
§ Mr. GallacherIn view of the scandalous retreat from the Dalton cheap money policy, I beg to give notice that I propose to raise this matter on the Adjournment at the earliest possible opportunity.