§ 14. Mr. A. Lewisasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will state the cost to a local authority of borrowing £100,000 and repaying it over a 60-year period at the current interest rates for each of the years from 1951 to 1961.
§ Mr. LewisCan the Minister confirm or deny that on average the figures have gone up 300 to 400 per cent.? If that is so, is it not due entirely to Government policy that interest rates have risen and, because of this, local authority rates have risen, as has the cost of administering local authority services and the cost of houses? All this is contrary to the Government's promises and pledges and the desire of the Government to keep down the cost of living. Can the Minister say what he will do to reduce interest rates and help ordinary people?
Dr. HillThe rise in interest rates has been necessary to keep the economy on an even keel, and local authorities cannot be insulated from that increase.
§ Mr. LewisIs not the right hon. Gentleman aware that in his Budget speech the Chancellor of the Exchequer said that the economy had not been on an even keel, and that over the last few months and years we have had one economic crisis after another? The Government have admitted that, and yet we have these high interest rates which they introduced. Can the right hon. Gentleman say how it is that with these high interest rates we have an economic crisis, which does not match up with what he just said?
Dr. HillI would not dare to compete with the hon. Gentleman in his consideration of economic factors, but the Government's policy has been clear, and this is consistent with it.
§ Mr. M. StewartDoes not the right hon. Gentleman realise that the continued repetition of these parrot phrases about Government policy has created a 808 situation in which it is becoming more and more impossible for local authorities to do their work, and is steadily reducing the number of people who can either own their own houses or hope to get a house at a reasonable rent?
Dr. HillThe hon. Gentleman's contentions are not in general supported by the facts, as will emerge in tomorrow's debate.
§ Mr. Frank AllaunWhy does not the Minister openly admit that this policy of high interest rates has more than doubled the rent of new council houses and halved the number being built since 1951, and will he stop using local authorities as scapegoats for the Government's housing policy?
Dr. HillLong-term interest rates are necessarily high when there is a famine of capital. That has been and is the position, and this is consistent with the Government's economic policy, which is bearing fruit.
Following are the figures:Annual cost by way of principal and interest combined in repayment of a loan of £100,000 for 60 years by way of half-yearly annuity and borrowed at the rate of interest charged on loans from the Public Works Loan Board at 31st March in each of the years in question.
| Public Works Loan Board rate of interest for new borrowings at 31st March | Annual cost of Repayment | |||||
| Year | Rate | |||||
| Per cent. | £ | s. | d. | |||
| 1951 | … | … | 3 | 3,603 | 14 | 1 |
| 1952 | … | … | 4¼ | 4,620 | 11 | 0 |
| 1953 | … | … | 4¼ | 4,620 | 11 | 0 |
| 1954 | … | … | 4 | 4,409 | 12 | 5 |
| 1955 | … | … | 4 | 4,409 | 12 | 5 |
| 1956 | … | … | 5½ | 5,720 | 12 | 2 |
| 1957 | … | … | 5½ | 5,720 | 12 | 2 |
| 1958 | … | … | 6¼ | 6,409 | 12 | 11 |
| 1959 | … | … | 5¾ | 5,948 | 5 | 0 |
| 1960 | … | … | 5⅞ | 6,062 | 17 | 3 |
| 1961 | … | … | 6⅛ | 6,293 | 15 | 0 |