§ 6. Mr. H. Hyndasked the Chancellor of the Exchequer what financial assistance will be given to local authorities to enable them to meet the extra cost of the increased interest rates announced by him on 8th July.
§ Mr. R. A. ButlerNone, Sir.
§ Mr. HyndIs not the Chancellor aware that this is a very heavy extra burden upon local authorities, and that there are plenty of precedents for giving extra assistance when extra expenditure is incurred? For example, only yesterday it was agreed to give fishing vessels extra subsidies to meet the increased cost of coal.
§ Mr. ButlerI am aware that this is an extra burden, but it is only bringing the rate up to market rate, and frankly, in the present position of the national economy, I think that my answer, namely, "None, Sir," is the right answer to give. Although I am afraid that it may impose a burden upon local authorities, they will have to take it.
§ Mr. JayIs it the policy of the Government that this burden should be borne either by higher rents or by higher rates?
§ Mr. ButlerI do not think that we need jump to such conclusions.
§ 8. Mr. H. Hyndasked the Chancellor of the Exchequer what consultations he had with the various associations of local authorities before he decided to increase the interest rates on local authority loans on 8th July.
§ Mr. R. A. ButlerNone, Sir.
§ Mr. HyndIs it not most unusual to take an important decision of this kind—which so vitally affects the finances of local authorities—without even doing the local authority associations the courtesy of consulting them?
§ Mr. ButlerAs my right hon. Friend the Financial Secretary remarked, the practice that we adopted has been inherited. One of my most distinguished predecessors—Sir Stafford Cripps—regarded such a course as being inevitable. As the Financial Secretary has declared in the course of debates in the House, we have been doing nothing unorthodox, much as I sympathise with local authorities.
§ Mr. JayIs the Chancellor aware that in 1952 his own Government granted extra financial assistance? Is it not inevitable that if he now decides not to do so, either rent or rates must be raised?
§ Mr. ButlerI cannot myself administer local authorities' finances; therefore, I cannot give hon. Members the answer to that question.
§ Mr. GaitskellWill the Chancellor explain what he meant by saying that in the present situation local authorities must bear this burden? Did he mean to imply that they must stop building so many houses, or simply that they would have to put up their rates?
§ Mr. ButlerI meant no more than I said to the conference of borough treasurers and representatives of finance committees at Folkstone the other day, namely, that the more economy in local government finance there is, the better it will be for all of us.