HC Deb 07 February 1956 vol 548 cc1496-7
39. Mr. Grimond

asked the Chancellor of the Exchequer the total amount of money raised by local authorities on the market since the announcement of the new policy; and if he will give an estimate of the success of this policy in curbing inflation.

Mr. H. Macmillan

Two local authorities have raised a total of £9 million by issues of stock, and another authority is about to raise £2 million more. No precise figures are available for loans raised on mortgage but it is estimated that loans raised and already arranged are approaching £100 million.

Mr. Grimond

In view of these figures, can the right hon. Gentleman state whether he feels this policy is working satisfactorily from his point of view, and whether it is leading to a reduction of work done by local authorities or merely to a higher cost for that work?

Mr. Macmillan

I think that it is working satisfactorily in two respects—in respect of more careful finance and in respect of these loans being raised in a form in which they represent genuine savings from the public.

Mr. H. Wilson

Is it not the right hon. Gentleman's experience that congestion not merely in the long-term capital market but in the medium-term capital market is now such that many further loans will lead to a positively prohibitive rate of interest for local authority work? Will the right hon. Gentleman now reconsider the whole of his policy, in view of the deterioration in the situation since it was announced by his predecessor?

Mr. Macmillan

No, Sir. My experience, of course, has not been long but, so far as I have been able to see, this policy has been working very satisfactorily in producing exactly the result that is desired.