§ 11.10 p.m.
§ The Minister of State, Treasury (Mr. Terence Higgins)
I beg to move,That the Local Loans (Increase of Limit) Order 1970, a draft of which was laid before this House on 7th July, be approved.Section 4(2) of the National Loans Act, 1968, provided a limit on gross issues of loans by the Public Works Loan Board to local authorities and others of £1,000 million. It also provided for the increase of this original limit in "steps" of up to £1,000 million each on not more than three occasions. The first increase was made in June, 1969, and this Order provides for the second of these increases.
The sum available within the old limit is £522 million, but on the basis of the Budget estimates local authorities are entitled to draw a further £711 million from the board during 1970–71 under the existing rules for local authority access to the Public Works Loan Board. There is, therefore, a risk of the Public Works Loan Board "drying up" early in the autumn when local authorities become entitled to take up their full loan quotas from the board. The purpose of this Order is to guard against that risk.
This increase in lending limits does not, of course, imply any increase in public expenditure, but is merely designed to enable local authorities to continue to borrow from the Public Works Loan Board at the level agreed earlier this year. On this basis the new limit would last approximately a further 12 months. Local authorities' borrowing powers remain exactly as they were. They are neither increased nor reduced. The effect of the Order is to do no more than enable the Public Works Loan Board to honour the obligations laid upon it by the Government.
882 It is my pleasure to continue the well-established tradition of 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 on an entirely voluntary basis.
§ 11.14 p.m.
§ Mr. Alan Williams (Swansea, West)
I join the hon. Gentleman in thanking the Public Works Loan Commissioners for their work.
What the hon. Gentleman has put forward represents the continuation of our own policies, and we appreciate the fact that his Order involves no increase in public expenditure. However, I would be grateful for some clarification on two points: how much has been lent since the 1969 Order, and what repayments have been received?
The Minister is right in saying that he would be coming to the House in about 12 months for further authority. It is appropriate that where possible we should observe a 12-months' interval since it gives the opportunity for a more thorough scrutiny by the House where hon. Members think that desirable.
§ 11.15 p.m.
§ Mr. Higgins
If I could answer the specific points raised by the hon. Gentleman, the figures he asked for are £597 million for 1968–69; £677 million for 1969–70, and to June, 1970, approximately £204 million.
Repayments of principle in 1968–69 were £129 million and of interest £236 million. The figures in 1969–70 were repayment of principle £152 million and of interest £276 million; up to June, 1970, repayment of principle £35 million and of interest £69 million.
I appreciate the hon. Gentleman's kind remarks and I understand the point he makes about the timing of the occasions on which the Government of the day feel it necessary to come before the House. This is determined by the extent of the advances made, but in due course it will be necessary to have further legislation on this point and he will perhaps know that this is a matter I raised myself last time it was necessary to legislate.
I sympathise with what the hon. Member said but I think we are right to stick 883 to a limit rather than to a specific period of time.
§ Question put and agreed to.
That the Local Loans (Increase of Limit) Order, 1970, a draft of which was laid before this House on 7th July, be approved.