§ 20. Mr. Frank Allaunasked the Secretary of State for the Environment what plans he has to alter the effective rate of 395 interest from 4 per cent. on loans to local authorities for housing so far as loans already entered into are concerned.
§ Mr. AmeryThe basic subsidy under the Housing Subsidies Act, 1967, often fails to achieve the effect claimed by the hon. Member. It is indiscriminate in its application and needs to be entirely recast along with other existing subsidies.
§ Mr. AllaunDoes the right hon. Gentleman realise that that is a very serious answer? Is it not a fact that hundreds of thousands of council houses have been built in the last four years on the firm understanding that they would not have to pay more than 4 per cent.? If the Government break that undertaking, it will not only raise rents drastically but will put local authority finances into the red.
§ Mr. AmeryThe hon. Gentleman was assiduous in criticising his own Government on this point, so perhaps I can do no better than to quote in reply what was said to him by the then Joint Parliamentary Secretary to the Ministry of Housing and Local Government, who said:
To make the present subsidies for new dwellings payable when the dwelling is started, instead of on completion, would cost at least £40 million a year extra and increase the average subsidy per new dwelling by well over £200. We could not in present circumstances contemplate such a large increase in housing subsidies".—[OFFICIAL REPORT, 18th Nov., 1969; Vol. 791, c. 252.]We are hoping to recast the subsidies in order to give better results which will, I hope, give more satisfaction to the hon. Gentleman.