HC Deb 10 November 1959 vol 613 cc185-8
24. Mr. Frank Allaun

asked the Chancellor of the Exchequer the total cost of a £1,500 council house after interest has been paid for sixty years at the current rate of 5¾ per cent.; and what would be the reduction in total cost if interest rates were restored to 3¼ per cent.

Mr. Amory

On the assumption of repayment by half-yearly annuities, the total cost for a loan at 5¾ per cent. would be £5,353; this sum would be reduced by £1,934 if interest were at 3¼ per cent.

Mr. Allaun

Is there not something seriously wrong when nearly three-quarters of the total cost of a house and its rent is due to interest charges?

Mr. Amory

I do not think that is necessarily so. One has to remember that the provision of capital is not merely a question of good will, and that capital will be, I should think, for the next quarter of a century at least in very short supply. If one distorts the picture by making it available on subsidised terms one is not doing a very good turn to our national economy, as hon. Members will realise if they cast their minds back some ten or twelve years.

Mr. Jay

Even if the Chancellor will not listen to my hon. Friend on this matter, will he at least listen to the unanimous recommendations of the Radcliffe Committee?

Mr. Amory

I have said that we shall be discussing that matter, I hope, with Mr. Speaker's permission, before long.

Mr. C. Royle

Has the right hon. Gentleman any idea what this means to a city like Salford, with very heavy rates, as they are at the present time, and people very badly housed? Cannot he do something about it?

Mr. Amory

I know, unfortunately, the tremendous demands for capital and what they look like when compared with the supply of capital available.

Mrs. Slater

Does not the right hon. Gentleman think that the provision of houses—after all, the Conservative Government have said that it is one of the priorities—is as important as the case which he has just put forward? Does not the Government's policy mean that thousands of people are being denied houses because the local authorities cannot face the present burden?

Mr. Amory

I am surprised at the hon. Lady raising the question of the number of houses provided when she compares the record of the past eight years with the record of right hon. and hon. Gentlemen opposite.

Mr. Jay

Is the Chancellor really unaware of the fact that the number of council houses built has been steadily falling for the last three or four years?

Mr. Amory

I am aware that local authority and private enterprise houses have for many years now exceeded 250,000 a year and that the provision is likely to continue on that scale. That is a figure greatly in excess of the figure achieved by right hon. and hon. Gentlemen opposite.

25. Mr. Frank Allaun

asked the Chancellor of the Exchequer what would be the approximate annual cost to the Exchequer of providing housing loans through the Public Works Loan Board at 3¼ per cent. instead of 5¾ per cent. on council houses now under construction; and if, in view of the housing shortage, he will consider such a step.

Mr. Amory

The approximate difference in annual cost would be £6 million, on the assumption that all local authority houses were financed by sixty-year loans from the Public Works Loan Board. I cannot agree, however, that local authorities should have the right of access to cheap loans from the Board.

Mr. Allaun

Is the Chancellor aware that the raising of interest rates has caused a drastic cut, nearly a halving, in council house building programmes and has been a serious blow to families on council house waiting lists? Would not the provision of low interest rate loans be a relatively cheap affair compared, for instance, with the £45 million a year which the Chancellor gave in the last Budget to those paying Surtax?

Mr. Amory

To the best of my knowledge, the capacity of the building industry is fairly fully taken up at present.

Mr. Bence

Will not the right hon. Gentleman consider that if it is sound and just to provide cheap money for industrialists to build factories, it is equally just to do so to enable local authorities to build houses?

Mr. Amory

The hon. Gentleman will be aware of the aid which we give to certain types of house-building.

Mr. Woodburn

Is the Chancellor aware that a great deal of that so-called money is public credit raised by bank credit and is in no way raised from the public, so that the increased charges are paid to the banks, which provide credit for the Government, and are not necessarily recovery of Government expenditure at all, but are a subsidy to the banks?

Mr. Amory

I think that the right hon. Gentleman will realise that among my responsibilities I have to consider the total amount of credit in whatever form it is raised, whether directly by the Government, or through other channels.