HC Deb 12 March 1957 vol 566 cc963-5
21. Mrs. Mann

asked the Minister of Housing and Local Government the average cost of a council house today; what would be the cost of interest spread over sixty years; and what would be the cost of interest over a thirty-year period.

Mr. H. Brooke

In the second quarter of 1956, the latest period for which figures are readily available, the average tender cost of a council house was £1,464. To service a loan for this amount bearing interest at 5½ per cent. the annual repayments would be £83 15s. 0d. a year if the cost were spread over sixty years, or £100 3s. 11d. if it were spread over thirty years. The total interest payment over sixty years would be £3,561 and over thirty years £1,542.

Mrs. Mann

Is the right hon. Gentleman aware that building societies give their applicants a choice between thirty and sixty years? Does he not think that this amount is an unconscionable one for ratepayers and taxpayers to pay in a burden of interest spread over sixty years?

Mr. Brooke

A local authority has certain discretion as to the period over which it raises a loan. If it chooses to raise a loan and amortise it over a shorter period, then the rents which it will have to charge will be proportionately higher.

Mr. D. Howell

Is it not a fact that if the Chancellor and some authorities in the country want to make an economy in public expenditure, then cutting down interest rates and the period of interest repayment is one of the best ways to achieve that? Will the Minister see the Chancellor with a view to discussing the possibility of this for the forthcoming Budget?

Mr. Brooke

Questions relating to the general rate of interest should be addressed to the Chancellor. I am not prepared to create a concealed subsidy by enabling local authorities to obtain money at artificially low rates of interest.

35. Mr. Gibson

asked the Minister of Housing and Local Government what was the all-in cost of a local authority two-bedroomed house built in 1951, and what is the similar figure for 1955; how much of this cost was represented by charges for interest on capital in 1951 and 1955; and what proportion of the rent charged was accountable to interest charges in each case in those years

Mr. H. Brooke

Since the Answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. Gibson

Surely the Minister could give us in abbreviated form the information asked for in the Question. Can he tell me, for instance, what is the increase in the amount of interest charge between 1951 and 1955?

Mr. Brooke

I have answered the Question as fully as I can, with a number of figures. If the hon. Gentleman will read HANSARD tomorrow, he may then perhaps wish to put down a further Question.

Following are the figures:

LOCAL AUTHORITY TWO-BEDROOMED HOUSES
Last quarter in each year Average cost of tender approved All-in cost of capital repayment and interest over sixty years
£ £
1951 … … 1,262 3,182
1955 … … 1,286 4,068

The proportion of interest in the all-in cost diminishes annually during the period for repayment of the loan.