§ 4.41 p.m.
§ The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. Enoch Powell)I beg to move,
That the Draft Local Authorities (Stock) Regulations, 1955, a copy of which was laid before this House on 22nd November, be approved.There are two simple purposes which lie behind these Regulations. The first is this. As the principal Regulations now stand, it is necessary for the Minister of Housing and Local Government to give his consent to the raising of stock by a local authority in the form of a Ministerial Order. That Ministerial Order is not one of those which is laid before this House. It affords no Parliamentary control and it has proved to be an administrative inconvenience as compared with the alternative method of a consent letter, because it delays consent and involves unnecessary administrative formalities.2106 The second purpose of the Regulations, which will be found dealt with in Regulation 4 (2), is to bring the procedure of the sinking fund for the redemption of stock into accordance with the sinking fund accumulated for the purpose of paying off mortgages. At the moment, the rate of accumulation of interest on sinking funds for paying off mortgages is to be at a rate not exceeding that determined from time to time by the Minister, so there is prescribed by that procedure a maximum rate of interest. At present, the Minister's prescription of the rate, not a maximum rate but an absolute rate, at which interest is to accumulate on sinking funds for paying off stock, is unconnected with that of sinking funds for paying off mortgages.
It is clearly convenient that the rate of accumulation in both cases should be the same, that in both cases it should be the maximum, so that the Minister can make an exception where the rate of interest or the investments of a local authority justifies it, and that any changes in the rates of interest should come into force simultaneously. If these Regulations are made, the new rate of interest will apply both for mortgages sinking funds and for stock sinking funds from 1st April next and will be at a rate of 3½ per cent.
§ Question put and agreed to.