HC Deb 13 November 1958 vol 595 cc554-5
30. Mr. Jay

asked the Chancellor of the Exchequer when he proposes to reduce the rate of interest charged to local authorities by the Public Works Loan Board.

The Economic Secretary to the Treasury (Mr. F. J. Erroll)

The rates charged by the Public Works Loan Board will, as usual, be adjusted when this is warranted by changes in the rates at which local authorities can borrow in the market.

Mr. Jay

As even the Chancellor as well as the Lord Mayor of London now admit that the need is for re-expanding our economy, how is it justifiable to impose this penal interest rate on local government house building? Does the Economic Secretary realise that the Government are now offering loans of public money to building societies at a lower rate than they are lending to local authorities for the same purpose?

Mr. Erroll

The rate is in accordance with the policy previously announced, and the latest reduction was made as recently as 25th October.

Mr. Jay

Is the hon. Gentleman aware that since then hire-purchase loans to building societies have been announced? How can it be right to lend public money to building societies for house building at lower rates than to local authorities?

Mr. Erroll

Loans are made to local authorities for many other purposes than house building.