§ Mr. StanleyI beg to move amendment No. 75, in page 77, line 16, at end add—
' (2) In ascertaining the limit imposed by that section any interest payable under section 7(6) of that Act on a loan made by the Secretary of State to the Housing Corporation which, with the approval of the Treasury, is deferred and treated as part of the loan, shall, so far as outstanding, be treated as outstanding by way of principal, whether the loan was made before or is made after the commencement of this section.'.The need for the amendment arises from doubts that have been expressed about the interpretation of the Housing Corporation's borrowing limit under section 7 of the Housing Act 1974. The corporation receives annuity loans from the National Loans Fund. Since it is not normally possible for housing associations, to which funds are on-lent by the corporation, to make repayments until the construction of a scheme is completed, and housing association grant paid, interest on the corporation's borrowings from the National Loans Fund is accordingly deferred for three years, after which the corporation can choose to pay the accumulated interest or capitalise it. If it is capitalised, the sum in question is added to the original sum borrowed and the interest becomes payable on it.Under the 1974 Act, it has been the practice to count against the borrowing limit only the advances made to the corporation but not the capitalised interest This has been of some concern to the Public Accounts Committee, which raised this question at its hearing on 16 April this year and expressed the view that in future capitalised interest should score against the borrowing limit. We had already appreciated that there was some doubt about how capitalised interest should be treated under the 1974 Act and had decided that the position should be made clear in the Bill.
I ask the House, therefore, to accept the amendment, which puts the treatment of capitalised interest beyond doubt and secures better control of the Housing Corporation's borrowing when it is treated in this way.
§ Mr. CostainMay I draw the attention of my hon. Friend to the misspelling of 392 the word "outstanding" in the amendment? I trust that it will be put right in the Bill.
§ Mr. StanleyI have not identified the spelling mistake, but I shall be delighted to ensure that the Bill as reprinted for the Lords is correct in spelling and every other way.
§ Amendment agreed to.