HC Deb 20 November 1962 vol 667 cc991-2
20. Mr. D. Griffiths

asked the Chancellor of the Exchequer if he will authorise a reduction in the rate of interest charged by the Public Works Loan Board to local authorities who wish to borrow money.

Mr. Barber

These rates are determined by the rates at which local authorities can borrow in the market.

Mr. Griffiths

That is just the reply which I anticipated I should receive. Does not the hon. Gentleman realise that this is a severe injustice to local authorities who have to cater for the community as a whole? All the essential services are operated on a non-profit basis, but they have to pay the same rate of interest as commercial undertakings? Does not he appreciate that such a grave injustice has never been more unwarranted and that it is time the position was altered?

Mr. Barber

I am sure the hon. Gentleman knows that the question of local authority borrowing is at present being reviewed. I would only remind him that the present rates on borrowings from the Public Works Loan Board came into force in October and that the rates have been reduced five times since the beginning of April of this year.

Mr. Jay

Does the Government wish to see an increase or a decrease in council house building?

Mr. Barber

My right hon. Friend the Minister of Housing and Local Government dealt with this point only a short time ago and said that he did not expect any difficulty in reaching his target on this account.

Mr. Manuel

Would the hon. Gentleman consider giving local authorities freedom to borrow from the Public Works Loan Board? Is he aware that local authorities are allowed to go to to the Board only if they cannot obtain money in the private market?

Mr. Barber

On many occasions at this Box I have explained what, I am sure, the hon. Gentleman knows only too well—the present policy of the Government. I ask the hon. Gentleman to await the current review of local authority borrowing which is now taking place.

Sir C. Osborne

Is there any hope of getting the Bank Rate down by 1 per cent. in the near future and so helping all these problems?

Mr. Barber

I hardly think that my hon. Friend would expect me to answer that.