HC Deb 01 November 1955 vol 545 cc837-8
20. Mr. Hoy

asked the Secretary of State for Scotland if he is aware that the Government's action in raising the loan charges on local authority houses from 3¾ per cent. to 5 per cent, has increased the ultimate cost of each £1,500 house by £963; and what action he proposes taking to relieve councils and tenants of this debt burden.

Mr. J. N. Browne

I would refer the hon. Member to the statement which my right hon. Friend made to the House on 27th October, when he said that he proposed to put in hand a comprehensive review of the housing subsidies in consultation with the local authority associations. This will take account of all relevant factors.

Mr. Hoy

It will be noticed that the Minister does not deny the facts given in these Questions; and as these terrific increases in the debt burden are the outcome of the Government's action in increasing the interest rate, what hope can he offer to local authorities and tenants of relief from this appalling debt burden which the Government have placed on their shoulders?

Mr. Browne

When the present subsidies were fixed in 1952 the rate of interest was 4¼ per cent. When it subsequently fell to 3¾ per cent. no change was made in Scottish subsidies. The local authorities cannot always hope to have it both ways. Subsidies have necessarily to be fixed on a long-term basis and cannot be altered with every change in the rate of interest.

Mr. Hoy

On the other hand, the Minister is bound to realise that no Government, except this one, has increased the rates four times in eight months, and how can any local authority carry on a housing programme when the Government have changed the interest rates in an upward direction so frequently as this Government have done?

Mr. Browne

The answer is that the investigations referred to by my right hon. Friend will take into account all the relevant factors, and I am sure that the associations will not fail to draw to his notice the point made by the hon. Gentleman.

Mr. Emrys Hughes

But when the hon. Gentleman's right hon. Friend meets the local authorities, will he be open to be influenced or persuaded by them, or will he lay down the law to them?

Mr. Browne

My right hon. Friend never meets the authorities without listening to them with great care and taking note of everything that they say.

21. Mr. Hoy

asked the Secretary of State for Scotland if he is aware that interest charges on each house built by the new town development corporations costing £1,650 have been increased by £17 13s. per annum, equal to an increase in rent of 7s. 6d. per week, as a result of the Government's action in raising the interest charges from 3¾ per cent. to 5 per cent.; and what action he intends taking to reduce this increase in the cost of living to the tenants.

Mr. J. N. Browne

The answer to the first part of the Question is, "Yes." As regards the second part of the Question, the levels of subsidies for houses in new towns in Scotland will be dealt with in the forthcoming review of Scottish housing subsidies.

Mr. Hoy

In the meantime, does the Minister think that the new town authorities have to go on increasing their debt burden, because of the changes in the interest rates, or must they pass on the total increase to the tenants? Is the Minister aware that if the rents are increased in this fashion, he will have great difficulty in attracting tenants to the new towns?

Mr. Browne

I have had no proposals from the corporations about increasing the rents, and I can assure the hon. Gentleman that at the forthcoming subsidy review the new towns in Scotland, like those in England, will benefit by any higher subsidies provided for overspill and the transfer of the industrial population.