§ 34. Mr. Jayasked the Chancellor of the Exchequer, in view of the policy of Her Majesty's Government to secure an increase in council house building this year, whether he will now reduce the Public Works Loan Board interest rate for housing loans to local authorities.
§ Mr. JayAs the right hon. Gentleman said himself last week that the Government wish council house building to expand, why does he maintain this 5¾ per cent. rate, which, to the smaller authorities, is a penal rate?
Mr. AmoryBecause, as I have explained before, the interest rates of the Public Works Loan Board are related to the comparable rates in the market. While we are encouraging local authorities to raise as much of their needed capital as possible in the open market, it would be quite unfair to those authorities who did so if we offered lower rates through the Public Works Loan Board.
§ Mr. JayIf the L.C.C. can borrow at 5⅓ per cent., how can the right hon. Gentleman expect the smaller authorities to believe that the Government can borrow only at 5¾ per cent.?
Mr. AmoryWe try to keep the rates as closely in line as we can and, as the right hon. Gentleman knows, whenever circumstances justify we change the Board's rate, but it would be wrong to do so on the results of one issue.