HC Deb 24 April 1969 vol 782 cc652-3
Q2. Mr. Bruce-Gardyne

asked the Prime Minister if he will take steps to improve co-ordination between the Secretary of State for Scotland and the Minister of Housing and Local Government on the one hand, and the Chancellor of the Exchequer on the other, regarding the control of the money supply.

The Prime Minister

I am not sure in what sense the hon. Gentleman is using the phrase "money supply" and no doubt he will make that clear in any supplementary question.

My right hon. Friends already work closely together on the financing of public sector transactions.

Mr. Bruce-Gardyne

I am sorry if my Question was not clear. The point which I had in mind was subsidisation of local authority borrowing rates by the taxpayer. How does the Prime Minister reconcile that with the Chancellor's attempts to get better control of money supply? How does he explain this contrasting policy to Mr. Goode of the International Monetary Fund?

The Prime Minister

This has been the policy for some years, and the hon. Member was probably involved in debates in this House in relation to the lowering of the effective interest rates which local authorities have to pay. I should have thought that he would agree that this is an extremely valuable contribution to housing problems whether in Scotland or in England and Wales. I do not think that it in any way interferes with the Chancellor's general policies in relation to monetary control and in relation to money supply, on which he had quite a lot to say in his Budget speech.

Mr. John Fraser

Is my right hon. Friend aware of the stringent controls placed by the Chancellor on the supply of money to local authorities for house-purchase schemes and the supply of money to housing societies? As personal consumption on housing is preferable to that on consumer goods, because it involves a lower import input, will my right hon. Friend consider what he can do to increase the supply of money for this purpose in the national interest?

The Prime Minister

My hon. Friend will be aware of the decisions announced by the Government in relation to public expenditure. This was one item on which restraint had to be asked for. At the same time, the Government have given full support to local authorities in building houses for rent where there is still a very large problem.