HC Deb 19 July 1962 vol 663 cc605-6
5. Mr. Boyden

asked the Minister of Housing and Local Government and Minister for Welsh Affairs how much local authority borrowing is currently on short term; and what is the average rate of interest being paid on these loans.

Mr. Corfield

For local authorities in the United Kingdom the amount of temporary borrowing outstanding at 31st December, 1961, was £1,080 million and the average rate of interest upon it in May, 1962, was 4½ per cent.

Mr. Boyden

Is it not a fact that too much money is being borrowed at short term? Is not the rate of interest too high, and is not a great deal of it "hot" money from abroad? What is the hon. Gentleman going to do about what should be a stable element in the English economy?

Mr. Corfield

I have no information about whether it is hot money from abroad, as the hon. Gentleman described it. I agree that excessive reliance on short-term money may have its dangers, but I think that it is a matter of opinion where the limit lies. The Chancellor of the Exchequer has recently asked for a full appraisal of all aspects of local authority capital finance, and no doubt this is a matter which will be considered.

Mr. MacColl

Is the hon. Gentleman aware that the Radcliffe Committee specifically criticised the proportion of local authority investment at short term and that his right hon. Friend the Member for Flint, West (Mr. Birch) has also criticised it? Is the hon. Gentleman in consultation with the Treasury about the proportion of local authority investment which should be at short term?

Mr. Corfield

As I indicated, this matter is being considered by the Treasury and I think that it would be unwise to commit myself any further at this stage.