§ 2.48 p.m.
§ The Financial Secretary to the Treasury (Mr. Harold Lever)
I beg to move,That the Local Loans (Increase of Limit) Order, 1969, a draft of which was laid before this House on 20th June, be approved.This Order increases the limit on the amount of money which the Public Works Loan Board can lend, which used to be done by means of a Public Works Loan Bill and is now done by means of this Order. I do not know whether there is any exhaustive and detailed interest in the technical processes of the Order, but if any hon. Member wants to raise any point I shall be happy to deal with it.
§ 2.49 p.m.
§ Mr. John Nott (St. Ives)
The Order increases the borrowing powers of local authorities and it comes immediately after the Third Reading of a Finance Bill which contains a Clause to enable local authorities to borrow abroad. These two matters are, in their way, directly related. I know that the Financial Secretary has been an enthusiastic sponsor of the idea that local authorities should be allowed, within their increased borrowing limits, to borrow abroad. When the Treasury, under the allowance given, enable a local authority for the first time to borrow abroad, may we have an assurance that the local authority concerned will bear a name which will set high abroad the credit of local authorities generally—for example, the Greater London Council, or the Manchester or Birmingham Corporation? When local authorities go abroad to borrow for the first time, we must ensure that a name is offered which is creditworthy in the eye of the lender.
I make this appeal because recently in the Press there have been indications that some county councils might be the first to lead local authorities in borrowing abroad. They are highly reputable and undoubted borrowers, but foreign lenders do not understand our system. This, I believe, would set the whole notion which the Financial Secretary adopted off in the wrong way. I appeal to him to ensure that the first borrower, within the limits set out in the Order, will be a name which will establish the credit of local authorities borrowing 1168 abroad. Let it be a good name for technical borrowing purposes. In my opinion it can be only one of three.
§ 2.51 p.m.
§ Mr. Terence Higgins (Worthing)
When we debated the National Loans Bill, under which this Order is tabled, we tried to move an Amendment to ensure that we should have an opportunity of debate whenever the Government increased the limit by £500 million rather than every time they increased it by £1,000 million. On that occasion, the decision was taken only by the Chairman's casting vote. At the end of a week in which we have had no fewer than four days on the Finance Bill, it is not surprising that anxiety for such a debate has been somewhat diminished and that even the Financial Secretary's enthusiasm for reading a large and detailed brief has somewhat diminished.
There is one point on which perhaps he would be good enough to give me information, if he has it available. In Committee on the National Loans Bill he pointed out that the limit imposed was on the gross amount, taking no account of the amount of repayment which had taken place from local authorities to those who had given them the loan in the first place through the Loan Commissioners. If he has that figure, perhaps he would give it now or, if not, perhaps he would let us have it on a future occasion. Effectively that increases the limit in the same way as that in which an overdraft might be increased, without making any significant difference to the amount actually advanced to the local authority.
We do not feel it necessary to divide against this Order, but perhaps the Financial Secretary will tell us at which stage we are likely to be up against the limit. In Committee the Financial Secretary suggested that probably he would have to come to the House in respect of the limit every 18 months whereas my hon. Friends suggested that it might be necessary every two years. In fact, it has taken almost exactly 18 months, but, of course, the Financial Secretary is in a position to determine whether his forecast was right or whether our forecast was right. We ought to know how near we are to the limit. Perhaps he would give some idea at which stage we shall pass the gross figure of 1169 £1,000 million set under the present legislation.
§ 2.53 p.m.
§ Mr. Harold Lever
The hon. Member for St. Ives (Mr. Nott) appreciates that he raised a rather technical point and that it is not appropriate for me to answer it across the Floor. He wants the biggest and most powerful name, from the technical point of view, to be presented in the initial borrowing. Beyond registering that point, I cannot usefully discuss with him the mechanics of the operation abroad for raising the money. I am prepared to discuss it with him privately at any time.
I will inform the hon. Member for Worthing (Mr. Higgins) that we have had repayments of £170 million from local authorities and that we are within £250 million of the limit. In the financial year 1968–69 the Public Works Loan Board lent £597 million. So far in this financial year they have lent about £142 million. That means that there is a balance of about £260 million available for further lending by the Board. It ought to be made clear that what is occuring is not an increase in local authorities' borrowing powers. This is an authorisation to the Public Works Loan Board to lend more to local authorities and it has nothing to do with the total borrowing powers of local authorities.
By tradition, I have the pleasant task of a concluding comment on a proposal of this sort by asking hon. Members to join me in expressing thanks to the Public Works Loan Commissioners for the services which they have continued to render with such skill and, of course, as we all know, on an entirely voluntary basis.
§ Question put and agreed to.
That the Local Loans (Increase of Limit) Order, 1969, a draft of which was laid before this House on 20th June, be approved.