HC Deb 08 March 1955 vol 538 cc127-9
14. Mr. Lewis

asked the Minister of Housing and Local Government if he will now review the Exchequer subsidy to local authorities for housing to compensate them for the additional costs resulting from the recently increased Bank Rate.

29. Mr. Gibson

asked the Minister of Housing and Local Government whether he is aware that the recent increase in the Bank Rate will entail an increase in the cost of loans to local authorities, whether from the Public Works Loan Commissioners or in the money market; what estimate he has made of the additional burden so imposed on the finances of local authorities; and what steps he proposes to take, by promoting legislation or otherwise, to ease that additional burden.

32. Mr. Jay

asked the Minister of Housing and Local Government if, in view of the present difficulties of local authorities in their loan arrangements, he will reconsider his decision to reduce the housing subsidy on 1st April.

The Minister of Housing and Local Government (Mr. Duncan Sandys)

I am not satisfied that any special action is called for at present.

Mr. Lewis

Can the Minister explain why he is not satisfied? Can he give some reasons?

Mr. Sandys

Interest and building costs have frequently changed up and down in the past without any immediate adjustment being made, and I see no reason to depart from that procedure.

Mr. Dalton

Does the right hon. Gentleman recall that his predecessor in office won a notable victory over the Treasury upon this issue? Will not he try to repeat that victory?

Mr. Sandys

I prefer to win my victories over other people.

Mr. Gibson

Is the Minister aware that my Question is quite a different one from No.14? Are we to take it that no sort of estimate of any kind was made of the impact which the rise in the Bank Rate would make upon local government finances and, in particular, that no sort of estimate was made of the extra money that it might cost housing authorities, and its effect upon rent? That is what my Question is concerned about.

Mr. Sandys

Of course, on the wider issue, the Equalisation Grant comes into the picture and I cannot go into that matter in answer to a supplementary question. With regard to the point about housing, there is a Question on the Order Paper about that, which I shall be answering later.

Mr. I. O. Thomas

The Minister just mentioned that he prefers to win his victories over other people. Does his range of territory include local authorities?

Mr. Sandys

Certainly not. I have found them always most co-operative.

33. Mr. Blenkinsop

asked the Minister of Housing and Local Government whether he will issue a new Order cancelling the Housing (Review of Contributions) Order, 1954, in view of the increase in interest rates recently announced.

Mr. Sandys

I have no power to cancel such an Order, except by making a new Order, fixing a revised subsidy rate.

Mr. Blenkinsop

Will not the right hon. Gentleman consider making such a revised Order, in view of the fact that unless he does so local authorities will be bound to raise rents of council houses quite considerably?

Mr. Sandys

I have power only to reduce the subsidy and not to increase it. That is presumably not what the hon. Gentleman wants.

Mr. Jay

Why was it that when interest rates were raised in 1952 the Government increased the subsidy, whereas this year, when interest rates are raised, the Government are reducing the subsidy?

Mr. Sandys

Increasing the subsidy requires legislation.

Mr. Jay

In that case, would the right hon. Gentleman advise local authorities to increase rents because of Government policy, or rates?