PUBLIC WORKS (LOCAL AUTHORITY LOANS) (Hansard, 22 November 1971)

§ The Minister of State, Treasury (Mr. Terence Higgins)
I beg to move, That the Local Loans (Increase of Limit) Order 1971, a draft of which was laid before this House on 5th November, be approved. This Order increases the amount which is available to the Public Works Loan Board for lending to local authorities. The amount was originally fixed at £1,000 million by the National Loans Act, 1968, and the same Act gave the Treasury power to increase the amount by order by £1,000 million at a time on three further occasions. This power is exercised by a Statutory Instrument and is subject to the affirmative Resolution of this House. Previous Orders have been made in 1969 and 1970. This is therefore the last occasion on which the amount may be increased under the existing legislation.
As at today, 22nd November, 1971, the Public Works Loan Board had £279 million available for lending. At the current rate of drawing this would last until mid-January. There are, however, likely to be heavy calls on the board in the remainder of this year. Authorities in England and Wales may not draw more than 25 per cent. of their quota during the final quarter of the financial year and many who may have deferred taking up loans may now make substantial drawings. Furthermore, as local authorities, especially those in the development areas, expand their capital programmes, there will be a corresponding increase in the demands on the board. For these reasons, the approval for the Order is sought now.
I would, however, remind the House, as I said a little more than a year ago, that this order does not in itself sanction any increase in local authorities' capital spending or mark any new increase in public expenditure programmes above those already announced. Local authorities are currently entitled to borrow 40 per cent. of their net new capital requirements, or 50 per cent. if they are in the less prosperous regions, from the board and the purpose of this order is to ensure that the board has available to it the funds necessary to meet its obligations.
1088 In conclusion I am sure that all hon. Members will join with 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, on an entirely voluntary basis.

§ Sir Elwyn Jones (West Ham, South)
We support the Order and think that it is useful as far as it goes. But will the money which is now sought be enough? This is a period of crisis in employment, and it would seem that public expenditure on public works is urgently called for. If the Minister of State comes to my constituency, he will see a mass of public work crying out for public funds. Here is an admirable opportunity for initiative and action. We are beset and depressed by the inactivity of the Government in not tackling the unemployment problem, and this is an opportunity for the hon. Gentleman to deal with this important and critical aspect as a sort of forerunner to tomorrow's debate on the subject. I should like him to tell us, therefore, what are the uses to which this money from the Loan Commissioners is to be put. I should like to be satisfied that at least a substantial proportion of it will be used to tackle the most serious social and economic problem in our country, namely, the human wastage involved in unemployment.

§ Mr. Higgins
I will, if I may, with the leave of the House, reply to the right hon. and learned Gentleman, although nowadays it is always rather hazardous to ask for that leave, but, if the House will allow me, I will do so.
I appreciate the point which the right hon. and learned Gentleman made, and, of course, he raised a very important question, but I am afraid I must reply in the way in which, on other occasions in similar contexts on these Orders, reply has been given, that this Order does not in itself sanction any increase in local authority spending, nor does it mark any new increase in public expenditure programmes over those already announced. On the contrary, it actually makes the funds available to fulfil those obligations, which are, of course, decided in a different context.
1089 Therefore, I am afraid that it will not be in order for me to reply to the specific point which the right hon. and learned Gentleman raised. I think there is a well-established position on these matters, on the lines I have just mentioned. But of course, not for one moment would I minimise the importance of the point that he raised. I think I am right in saying that there will be an opportunity to debate this tomorrow.

§ Mr. Joel Barnett (Heywood and Royton)
I had not intended to intervene on this matter tonight, but the hon. Gentleman has said that it is a tradition not to go into these Orders at any greater length—that it is not the custom to do so. Of course, we are not in traditional times. We have not before had a Government who have led us to 1 million unemployed. The Minister comes to this House and suggests—not, I agree, the sanctioning of capital expenditure, though it is a pity he did not tell us there would be—that all that we are doing is making available another £1,000 million.
I think the Minister might have recognised that we are in anything but normal times, and that he might have told us how the Government are planning to ensure that this £1,000 million, or, indeed, very much more than this, is so spent as to bring down this intolerable burden of 1 million unemployed. It is not good enough for the Minister to come here and say that this has happened in the past. In the past we did not have a Government who led us to 1 million unemployed. This is a totally different situation.
I must say I am extremely disappointed by the hon. Gentleman's explanation, and I am sure that all my hon. Friends will be extremely disappointed. Really, it is quite disgraceful, and if it were not for the fact, as I know it is, that some of my hon. Friends have urgent matters to raise on another issue, I am sure that they would want to pursue this one at great length. It is a very serious matter that the Minister should blithely come along and say "It is only £1,000 million" without explaining the matter more fully. All I would say to him is that the people of this country will not be satisfied with such a facile explanation about what happened in the past when we now have a very different situation from that which 1090 normally existed, and with the Minister, with no more explanation than that, from that Dispatch Box recommending this £1,000 million increase.

§ Mr. Higgins
If I may intervene in the hon. Gentleman's speech, it would be quite wrong for the hon. Gentleman to suggest that I came with facile explanations, still less that I was suggesting that £1,000 million was an unimportant sum. On the contrary, this is a very important matter and the Order will give us scope for taking just the kind of measures which I understand him to favour. It is quite wrong that the hon. Gentleman should seek to make this trite political attack. As I have said, we shall have an opportunity tomorrow to debate the matter at length and my right hon. Friend the Chancellor of the Exchequer on that occasion, which is the appropriate occasion, will be delighted to answer the hon. Gentleman's point.

§ Mr. Barnett
I am sorry that the hon. Gentleman, unusually for him, seems to have lost his cool. I was putting the reasonable point of view that we are being asked to sanction an extra £1,000 million, and the Minister simply said that he would tell us tomorrow how it might be used. It is not good enough, and I hope that he will not have the opportunity on many more occasions to present this sort of case.