HC Deb 18 March 1964 vol 691 cc1366-7
19. Mr. Gourlay

asked the Secretary of State for Scotland what were the total interest charges repayable on completion of the 60-year loan period on a local authority four-apartment house built in 1951 at a cost of £1,644, and a four-apartment house built in 1963 at a cost of £2,508.

Mr. G. Campbell

The arithmetical total of the interest payable yearly over 60 years on a loan of £1,644 at Public Works Loan Board rates in 1951 would be £1,911, and the corresponding figure for a loan of £2,508 in 1963 would be £6,443.

Mr. Gourlay

Is the hon. Gentleman aware that while the cost of building an average four-apartment house in Scotland has increased by only £864—according to the figures given in answer to me by his right hon. Friend last week—a considerable increase of about £4,800 in interest charges arises as a direct result of Government economic policy, and not increased wages for building workers, as his right hon. Friend said last week? Will he, therefore, give an assurance that the Government will see that interest rates are reduced, or that housing subsidies are increased, instead of continually calling on local authorities to ask tenants to pay higher rates in order to meet these interest charges?

Mr. Campbell

My right hon. Friend would not give that assurance. The hon. Member knows Government policy on interest rates very well. Any help given to local authority housing should be provided openly in housing subsidies and should not be concealed by means of an artificially low interest rate. However, the hon. Gentleman will be aware that under the Public Works Loans Act, 1964, a local authority will be able to obtain a proportion of its long-term borrowing needs at the Government credit rate rather than the full open market rate.

Mr. Gourlay

We are only too well aware of Government policy on interest rates. Is the hon. Gentleman aware that in 1963 Scottish local authorities paid no less than £10,500,000 more in interest than they would have paid if the rate had been the same as in 1951 when his party took office? Will he seriously consider whether housing subsidies in Scotland are adequate to meet the high interest rates which local authorities are called upon to pay?

Mr. Campbell

The rate of local authority house building in Scotland is increasing. Construction was begun in 1963 on 25,261 local authority houses in Scotland, which shows a large increase.