§ Mr. Barber
I beg to move, in page 6, line 6, at the end to insert:(2) Where, in the exercise of powers conferred by any enactment, an authority to which paragraph 9 of Part II of the First Schedule to this Act applies uses money belonging to any fund for a purpose for which the authority has power to borrow, the foregoing provisions of this Act, as applied by the foregoing subsection, shall apply as if there were comprised in the fund (in addition to the actual content thereof) property, being narrower-range investments, having a value equal to so much of the said money as for the time being has not been repaid to the fund, and accordingly any repayment of such money to the fund shall not be treated for the said purposes as the accrual of property to the fund:Provided that nothing in this subsection shall he taken to require compliance with any of the provisions of section five of this Act in relation to the exercise of such powers as aforesaid.This Amendment has been tabled in fulfilment of an undertaking I gave to the hon. Member for Shoreditch and Finsbury (Mr. Cliffe) during the Committee stage of the Bill. We gave further thought to the Amendment he then proposed, and which he withdrew on my giving that undertaking. The Amendment meets the needs of the local authority on whose behalf the hon. Gentleman was speaking, and also the needs of other local authorities which have approached us.
The purpose of the hon. Gentleman's Amendment was to ensure that moneys from the fund of a local authority, used by the authority for internal purposes, should be treated as narrower-range 1935 investments. When we discussed this question in Committee upstairs I gave in some detail the reason why I thought that the hon. Gentleman was right in principle in his proposal. I also gave an example to show why I thought that that was the case. I hope, therefore, that the House will acquit me of any discourtesy if I do not go into it in detail on this occasion.
The provision I propose now is made in the form of a new subsection (2). Clause 6 relates to the statutory powers of investment of funds other than trust funds. The new subsection provides that the internal use by a local authority or similar authority of money in those funds for purposes for which it may borrow shall be treated as if a narrower-range investment had been made with the money; and accordingly any repayment shall not be treated as an accrual to the fund, but as a realisation of an existing investment.
I know that this Amendment will be welcomed by local authorities, and I hope that the House will agree that the use of the local authority's own fund for internal purposes should be treated in the way proposed.
§ Mr. Mitchison
I recollect the discussion on this matter in Committee upstairs, and I am glad that the hon. Gentleman has been able to meet the views of the local authorities, including the London County Council, which I think was the authority at whose request my hon. Friend raised the matter.
On behalf of my hon. Friend and others on this side of the House, I thank the hon. Gentleman for this Amendment.
§ Amendment agreed to.