HC Deb 02 August 1962 vol 664 cc772-3
12. Mr. Frank Allaun

asked the Chancellor of the Exchequer if he will state the total of Public Works Loan Board loans made in 1951, 1956 and 1960.

Mr. Barber

In 1951, the Public Works Loan Board lent £390 million. In 1956 and 1960, it lent £156 million and £44 million, respectively.

Mr. Allaun

Do not those startling figures show that such loans have virtually been killed by the double interest rates which reflect the market rates of interest? Will the hon. Gentleman ask the new Chancellor to consider seriously making special cheap housing loans through the Board?

Mr. Barber

As the hon. Gentleman knows, our present policy in this matter was settled in October, 1955, whereby local authorities raise the funds they need, in general, on the market as far as they possibly can and the Public Works Loan Board is only used, as it were, as a lender of last resort. In considering the activities of local authorities, it is not fair to refer solely to the sums on loan from the Public Works Loan Board. The net outstanding debt of local authorities rose between 1950 and 1960 from something over £2,000 million to something over £6,000 million. This gives a much better indication of the level of their activities.

Mr. Jay

Does the hon. Gentleman's answer mean that it is the policy of the Government to stop council house building and to drive local authorities bankrupt?

Mr. Barber

Not in the least. The right hon. Gentleman will be the first to appreciate that the cost of borrowing is as much a cost of providing goods and services, council houses and other things as is the cost of raw materials and of wages, and a large proportion of that cost is in any event borne by the Government by way of grant aid to local authorities.