HC Deb 14 May 1959 vol 605 cc1402-3
8. Mr. Frank Allaun

asked the Chancellor of the Exchequer what proportion of the loans for council house building is being provided by the Public Works Loan Board; and what proposals he has for increasing it.

Mr. Erroll

It is estimated that, in the financial year, 1958–59, approximately 8 per cent. of local authority loans for house building came from the Public Works Loan Board. My right hon. Friend does not propose any change in the present arrangements under which the Public Works Loan Board lends only in so far as local authorities are unable to raise their capital in the market.

Mr. Allaun

Is not this exceedingly low proportion of 8 per cent. due to the high interest rate of 5¾ per cent. for loans over thirty years? If the Government really wanted to expand council house building, could they not either provide special low interest loans themselves or make a grant to the Board so that it could reduce its rate to 3 per cent., which was the rate up to 1951?

Mr. Erroll

No, Sir. With regard to the first part of the supplementary question, we do not accept that the low percentage is an indication of excessively high interest rates. We contend that the present arrangements fully provide for the supply of local authority needs. With regard to making loans at a specially low rate of interest available to local authorities, that would be contrary to the policy which has been explained by my right hon. Friend on many occasions.