HC Deb 06 December 1955 vol 547 cc168-71
3. Mr. Lewis

asked the Chancellor of the Exchequer whether, as from the commencement of the next financial year, he will make facilities available to local authorities for drawing interest-free loans from the Treasury for housing purposes, up to a specified annual total.

Mr. R. A. Butler

No, Sir.

Mr. Lewis

If the Chancellor will not agree to the suggestion contained in the Question to make facilities generally available, will he favourably give consideration to it in respect of bomb-damaged cities and boroughs, because of their peculiar position? Will he consider providing the facilities at least for a period of time, until they have got over their bomb-damage troubles?

Mr. Butler

I realise that this is a particular problem but I am afraid that I cannot add to my Answer. If the hon. Gentleman wants an answer on that point he had better put down a specific Question.

24. Mr. Drayson

asked the Chancellor of the Exchequer if, in view of the alterations in the method of local government borrowing, he will introduce legislation to confer trustee status on loans issued by urban and rural district councils.

Mr. R. A. Butler

Some of these authorities already have trustee status for their loans. Proposals to extend it to all of them were announced on 27th July by my right hon. Friend the Financial Secretary to the Treasury. The proposals have since been agreed with representatives of the local authorities and will be the subject of legislation when opportunity offers.

Mr. Drayson

Can my right hon. Friend say how soon he thinks this legislation will be introduced? Can he name the date? That would help the local authorities.

Mr. Butler

No, but I will see that the attention of the Leader of the House is drawn to the Question of my hon. Friend.

40. Mr. Hannan

asked the Chancellor of the Exchequer if, in view of the response to Glasgow Corporation's recent application for a loan of £5 million in the open market he will reconsider his policy and restore freedom to local authorities to borrow through the medium of the Public Works Loan Board.

43. Mr. Emrys Hughes

asked the Chancellor of the Exchequer, in view of the fact that 87 per cent of the Glasgow Corporation's latest loan has been left with the underwriters and that this will have an adverse effect on future attempts by local authorities to raise money on the open market, if he will now revise his policy and grant greater facility for loans to be granted from the Public Works Loan Board.

51. Mr. Roy Jenkins

asked the Chancellor of the Exchequer if, in view of the failure of the recent Glasgow Corporation loan, he will reconsider his policy on local authority borrowing.

Mr. R. A. Butler

The Answer is "No, Sir."

Mr. Hannan

Does the right hon. Gentleman recognise that his Answer will be received with the greatest resentment by local authorities throughout the country? Is he further aware that the Glasgow local authority has been forced into the market for a loan, in accordance with a statement made by the Chancellor himself in his Budget speech, and that when Glasgow is joined by other local authorities the interest charge on money is likely to soar? Is that not evidenced by the statement made today that Liverpool local authority is offering stock at 97 whereas Glasgow offered it at 98½, and is not the Chancellor assisting speculators to rig the market?

Mr. Butler

That was the first loan, and we know that in the final stage it was commercially underwritten by the market. I do not think that the Corporation of Glasgow will suffer. We shall learn from the experience of that loan, and I trust that the next one, namely the Liverpool loan, will have more success.

Mr. Hughes

Is the Chancellor aware that in this sense he has become the Santa Claus of the money changers? Does he realise that, while he is the hero of the sharks of the Stock Exchange and the Shylocks of the City, he has come to be known as No. 1 enemy of local authorities?

Mr. Butler

I realise that there has been a marked change in the method of financing local authorities, and that this was done on purpose, as part of Government policy. Further, I realise that I am not quite so popular with some of the gentlemen in the City as the hon. Gentleman imagines.

Mr. J. Henderson

Is the Chancellor not aware of the fact that the real reason for the financial flop of the City of Glasgow £5 million loan was the inefficiency of the Socialist administration, and is it not akin to the situation in which the nation found itself when the Socialist party left office?

Mr. Jenkins

Is the Chancellor really satisfied about a position in which a local authority of the size and standing of Glasgow cannot borrow at a yield of £4 17s. per cent., and in which other local authorities are being forced to offer a longer term and a rather higher rate of interest, and thus saddle themselves with the very high interest charges which his present policy puts upon them for an even longer period than Glasgow had to accept?

Mr. Butler

I realise the difficulties this involves for local authorities, and I am very sympathetic to them. However, in the national interest, from the point of view of the below-the-line Budget, in my view it was essential to make a change in the method of financing local authorities.

Mr. E. Fletcher

Does not the Chancellor realise that this humiliating experience of the Glasgow Corporation will make it infinitely more difficult for smaller local authorities to borrow, except at exorbitant rates of interest which, in turn, will make it impossible for them to carry out works of local importance?

Mr. Butler

I do not agree that this was a humiliating experience. Glasgow happened to be the pioneer, and pioneers sometimes have rather a difficult time.

Mr. Jay

Though we all realise the difficulties, can the Chancellor tell us what are the advantages of this procedure?

Mr. Butler

I outlined them in my original Budget statement.

Mr. Hughes

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

52. Mr. Emrys Hughes

asked the Chancellor of the Exchequer if he has considered the letter on rates of interest for public loans from the Town Clerk of Maybole forwarded to him by the hon. Member for South Ayrshire; and what action he will take in the matter.

Mr. R. A. Butler

Yes, Sir; but I regret that I cannot agree to the town clerk's suggestion.

Mr. Hughes

Is the Minister aware that the town council requires the money for a sewerage scheme? Is he now proposing to tax sanitation and make it more difficult for local authorities to improve public health in their areas?

Mr. Butler

No, Sir; I am not proposing to tax sanitation. No doubt the local authority will be able to get its money in one of the ways suggested.