HC Deb 19 April 1955 vol 540 cc9-10
17. Mr. Oliver

asked the Minister of Housing and Local Government whether he will make a statement in respect of representations made to him by local authorities concerning the high rate of interest charged to local authorities on their borrowings.

20. Mr. Slater

asked the Minister of Housing and Local Government how many representations he has now received from local authorities concerning the effect of Circular No. 23/55, relating to new borrowing rates, on their finances, and consequently on their duty to carry out essential services; and what proposals he has for dealing with this problem.

Mr. Sandys

Up to the end of last week, letters on this subject had been received from 18 local authorities. No special action is contemplated.

Mr. Oliver

Is the right hon. Gentleman aware of the great financial burden which the increase has placed on the borrowing of local authorities? Is he aware that the increase on a loan for 15 years and over, for housing purposes, represents over 1s. a week on a £1,500 house? In view of that great increase, if the Government do not intend to alter the Bank Rate, would the right hon. Gentleman make recommendations to his right hon. Friend the Chancellor of the Exchequer about an increase in the subsidy?

Mr. Sandys

The increase in the cost of loan charges on the average council house will be about £3 a year.

Mr. Oliver

That is what I said.

Mr. Slater

Is the right hon. Gentleman aware that even if he has received only 18 letters about this matter, hon. Members in all parts of the House are receiving correspondence from various local authorities in their constituencies who are very concerned about it and about the effect which it will have on the social services for which they are responsible? Does not the right hon. Gentleman think that some incentive should be given to these authorities to improve and extend their social services instead of action being taken which will cut the services down?

Mr. Sandys

If hon. Members are receiving a lot of correspondence on this subject they will no doubt be passing it on to me in due course.