HC Deb 14 November 1961 vol 649 cc177-8
20. Mr. Frank Allaun

asked the Chancellor of the Exchequer if, following the 1 per cent. reduction in the Bank Rate, he will now lower the present interest rates on Public Works Loan Board loans, which are causing increases in council house rents.

Sir E. Boyle

As the hon. Member will have observed, the rates of interest charged by the Public Works Loan Board were reduced on 11th November, following the fall in market rakes.

Mr. Allaun

Does not the hon. Gentleman admit that even after that reduction the Board's rates of 6⅞ per cent. for loans up to fifteen years and 6¾ per cent. for longer-term loans are so high as to make it necessary for councils to charge impossibly high rents?

Sir E. Boyle

I do not admit that. With regard to council house rents, the effect of changes in interest rates one way or the other tends to be masked by the way in which local authorities conduct and finance their housing operations. The broad effect of the arrangements is to free local authorities from the need to charge rents directly reflecting the cost of particular groups of houses. In addition, many councils also operate rent rebate schemes for the benefit of poorer tenants. I do not believe that our economic system is a conspiracy against the less well off to anything like the extent the hon. Gentleman frequently makes out it is.

Mr. Denis Howell

Would the hon. Gentleman agree that in respect of hundreds of thousands of house owners there is no masking the position that immediately the Bank Rate goes up their mortgage rates go up and that although the Bank Rate has come down, their mort- gage rates have stayed where they were? What will he do to protect the interests of young people who are trying to solve their own housing problems?

Sir E. Boyle

That is another question.

Mr. Rankin

There is the conspiracy.