Subsidy (Interest Rate Increase) (Hansard, 4 March 1952)

§ 9. Mr. Douglas Jay
asked the Minister of Housing and Local Government whether the recent increases in the rate of interest on housing loans from the Public Works Loan Board, will be met wholly out of higher subsidies from the Exchequer, or partly out of local rates.

§ 10. Mr. Charles Pannell
asked the Minister of Housing and Local Government the offer made and the result of his negotiations with the local authority associations on the subject of the housing subsidy; and whether his offer to them completely compensates for the rise in interest rates on the whole amount of the Exchequer and local subsidy.

§ 11. Mr. Lewis
asked the Minister of Housing and Local Government the estimated cost to his Department of implementing his promise that the increase in the housing subsidies will be sufficient to cover the whole of the increased costs to local housing authorities arising from the new interest rates.

§ 17. Mr. H. Hynd
asked the Minister of Housing and Local Government the new rate of subsidy for houses built by local authorities; and whether this will involve an increase in the subsidy payable from local rates.

§ 26. Mr. George Thomas
asked the Minister of Housing and Local Government if he will make a statement on the results of his conversations with representatives of local authorities concerning the increased subsidy for housing purposes.

32. Mr. Norman Smith
asked the Minister of Housing and Local Government now to inform the House concerning his discussions with the local authorities about housing subsidies.

§ Mr. H. Macmillan
I would refer the hon. Members to the reply given to the hon. Member for Southend, East (Mr. McAdden) on 28th February.

§ Mr. Jay
Can the Minister explain why he gave a misleading answer and, even if he had been having a very fierce quarrel with the Treasury, would it not have given rather less blatant advertisement to the confusion in the Government on this subject if he had given the correct answer the first time?

§ Mr. Macmillan
The right hon. Gentleman makes this imputation against me. I gave no misleading answer. Why should I? I have been a long time in this House and I have never been accused previously of giving a misleading answer.

Hon. Members
Withdraw.

§ Mr. Thomas
In view of the fact that the Minister's previous answer to the House indicated that local authorities would be completely covered in respect of the increased interest, will he now either apologise or make his position clear?

§ Mr. Macmillan
I thought it was rather for the right hon. Gentleman to apologise, but I will try to make my position clear if hon. Members will study the figures which were given; they are complete, if somewhat complicated.
The subsidy structure covers a wide range and, so far as I know, "housing subsidy" has always, since introduced in 1945, meant a payment to support the rent structure, of which three-quarters has always been paid by the Exchequer and a quarter by the rates. I used the term "housing subsidy" in that sense; that is the common form of it. I observe that I have been very much blamed in other quarters for having been so generous. What has really happened is that the right hon. Gentleman and his friends are annoyed at having been deprived of a grievance.

§ Mr. Pannell
While I acquit the Minister of any desire to mislead the House—[HON. MEMBERS: "Oh"]—I can only speak for myself—I would ask him if he is aware that his answer did convey the impression that the local authorities would be entirely reimbursed? May I refer the Minister to his answer given to my hon. Friend the Member for Newcastle - upon - Tyne, East (Mr. Blenkinsop), which appears in c. 26 of the OFFICIAL REPORT of 19th February? I will read the answer in which—

§ Mr. Speaker
This is getting much too long for a supplementary question.

§ Mr. Macmillan
The hon. Gentleman has been very courteous in the way be has put his supplementary question. If there has been any misunderstanding, I am sorry, but I have always understood 193 the expression to mean a payment, three-quarters of which was paid by the Exchequer and a quarter by the local authority. That, at any rate, is what it does now clearly mean. I would add that I think no one who wants to see the strengthening of local government would ever like a system in which 100 per cent. subsidies were paid.

Mr. Smith
Is the right hon. Gentleman aware that the increased housing subsidy, so far as it falls locally, will mean a 2d. rate in the City of Nottingham, and can he say how that helps the nation's balance of payment by transferring money from the pockets of the ratepayers to those of the bankers?

§ Mr. Lewis
Is the Minister aware that in Question No. 11 I have quoted the actual reply to the statement made by my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) and in that the Minister did say there would be no increase in the local rates? Can he explain this?

§ Mr. Macmillan
If there was any difficulty about hon. Members understanding what I intended to say or did say, the matter is all now settled, so that I do not see that the point arises.

§ Mr. Hynd
May I further ask the Minister to recall the reply he gave to my hon. Friend the Member for Nottingham, South (Mr. Norman Smith), who particularly asked: Will the Minister bear in mind that there is grave anxiety among the local authorities lest any increase in the subsidy should not be sufficient to off-set the extra cost of borrowing… to which the Minister replied: …if that be their anxiety I can allay it immediately."—[OFFICIAL REPORT. 19th February, 1952; Vol. 496, c. 26.] We took that as a promise that the value of the subsidy would cover the whole cost.

§ Mr. Macmillan
No local authority has ever asked for this. I have met them all. Nobody has ever raised this or doubted what they have always known, that a quarter lay upon the rates. I still think that hon. Gentlemen opposite are annoyed at being deprived of their grievance—[Interruption.]

§ Mr. Speaker
Order. This matter must be pursued some other time.

§ Mr. Blenkinsop
In view of the unsatisfactory nature of the reply, I beg to give notice that I shall endeavour to raise the matter on the Adjournment.

§ Mr. Hynd
On a point of order, I understood the Minister to say, he said it rather quickly, that he was also answering Question No. 22. If he did, may I ask him—

§ Mr. Speaker
No.