HC Deb 09 February 1961 vol 634 cc617-9
53. Mr. Emrys Hughes

asked the Chancellor of the Exchequer what representations have been made to him by the Ayr County Council on the question of interest rates; and what has been the nature of his reply.

Mr. Barber

I am aware of these representations. I have nothing to add to what I said earlier in reply to the hon. Member for Fife, West (Mr. W. Hamilton).

Mr. Hughes

Is the hon. Gentleman aware that the Minister of Health said yesterday that he wanted to encourage local authorities to develop the health services which belong to them? How can they do that when such high interest rates are charged?

Mr. Barber

As one would expect, nothing that my right hon. Friend said conflicts with what I said earlier.

54. Mr. Manuel

asked the Chancellor of the Exchequer what action he intends to take, following the representations made to him by Ayr County Council, regarding the high rate of interest charged by the Public Works Loan Board on money borrowed by local authorities for capital works.

Mr. Barber

I intended to answer this Question with Question No. 53.

I can only say that there is nothing that I can add to what I said in answer to the earlier Question of the hon. Member for Fife, West (Mr. W. Hamilton).

Mr. Manuel

Does not the Economic Secretary recognise that local authorities in Scotland are getting into particular difficulty with the build-up of public work which they cannot undertake simply because of the imposition of high interest charges by the Public Works Loan Board? I appeal to him to get his right hon. and learned Friend to consider this matter, with a view to aiding local authorities which could give him very good grounds for making the change.

Mr. Barber

As my right hon. and learned Friend said to the hon. Gentleman on previous occasions in connection with representations by the Ayr County Council, we do not consider that it is right that, with capital in short supply, local authorities should be insulated from the effects of current interest rates.

Mr. W. Hamilton

Does the hon. Gentleman recollect that his earlier replies indicated that a reduction in the interest rates to local authorities would be tantamount to giving them a subsidy? If that is so, can he explain why a farmer building a piggery gets a 50 per cent. subsidy and a local authority does not get anything at all for building a house for individuals? In addition, Colvilles steel company in Scotland is to get a £50 million subsidy from the Government with no interest whatever—at any rate. in the first year.

Mr. Barber

Those points go somewhat wider than the representations made by the Ayr County Council, but there can be no doubt that to provide preferential interest rates would be to give a concealed subsidy, because it would involve giving facilities for borrowing at rates below those ruling in the market.