§ 18. Mr. Moss
asked the Chancellor of the Exchequer whether he is aware of the difficulties caused to local authorities by repeated changes in the rates charged by the Public Works Loan Board for the money lent to local authorities; what steps he is proposing to meet these difficulties; and whether he will give an assurance that such uncertainty will be avoided in future so that local finances may have reasonable stability.
§ The Financial Secretary to the Treasury (Mr. Henry Brooke)
I have nothing to add to my right hon. Friend's Budget statement on 26th October, in which he stated that day-to-day fluctuations will be avoided, but that the Treasury will continue to adjust local loans rates in either direction as may be required to keep them in line with future changes in the level of the relevant rates in the market.
§ Mr. Moss
Does the right hon. Gentleman agree that his right hon. Friend's too frequent tinkering with the Bank Rate and the rate of interest on loans to local authorities has caused confusion and caused them to abandon major schemes? Will he give an undertaking that if he must apply this Keynesian technique, he will do so in such a way that a reasonable period of time is given for the operation of the Bank Rate at a certain level?
§ Mr. Brooke
I certainly agree that day-by-day fluctuations, as my right hon. Friend said, are undesirable, but the general principle under which these rates must fluctuate with changes in market rates was stated in the House by Sir Stafford Cripps.
§ Mr. Woodburn
Is the Financial Secretary aware that local authorities are already controlled by the Government in that they need permission for all their activities? Why is it necessary to penalise them by making them pay these extra charges and interest when they are already under control? Would the right hon. Gentleman further state who gets the money which local authorities pay in the extra charges? Who benefits when the local authorities part with the money? It goes somewhere.
§ Mr. Brooke
There is no penalising of the local authorities. The right hon. Member for East Stirlingshire (Mr. Woodburn) is asking that the local authorities should be put in a privileged position and alone be insulated from changes in money rates.