§ Read 3a (according to Order).
§ THE LORD CHANCELLORMy Lords, I beg to move that the Bill do now pass.
§ Moved, That the Bill do now pass.—(The Lord Chancellor.)
§ THE EARL OF GLASGOWMy Lords, referring to powers of borrowing by local authorities, I should like to ask the noble and learned Viscount on the Woolsack a question of which I have given him private notice. Prior to the outbreak of the war, it was the practice of most local authorities in Scotland to borrow money on bill or promissory note when the money was required only for a short period. At that time, several of the larger local authorities, when promoting Provisional Orders or Private Acts, arranged to include therein clauses giving them specific power to borrow in this way. Shortly before the war, the English banks refused to discount bills or promissory notes of those local authorities who had not specific powers to borrow by this means. The obvious result of this is that local authorities who had included in local Acts such a provision, without at the time having any anticipation of its ultimate effect, are still being able to borrow by way of bill, which the local authorities, not so placed, but performing exactly the same functions, are not able to do.
To make the deterrent effect quite clear, the present interest rate on bills is slightly over 1 per cent., whereas short-term borrowing by other methods involves a payment of interest of about twice that rate. The matter was taken up by the 1023 Association of County Councils for Scotland with the Government, who were asked that the same powers of borrowing should be conferred on all public authorities. The Government refused to take action, on the ground that to give more public authorities powers to borrow by bill would be against the national interest. The result of this is that in my own county alone in a full year the ratepayers have to set aside an additional sum by way of interest of approximately £10,000, a burden not felt by those local authorities who, by chance, have specific powers to borrow by way of bill. Surely this is a case of making certain that Paul, the Government, will get his money by robbing Peter, the ratepayer. Doubtless my advice will be overruled, but, in all fairness and justice, all local authorities should be placed on the same footing in the matter of short-term borrowing. I do not want to criticise the Goverment in any way. I realise that there is a war on and that things are difficult in regard to borrowing, but this is a legitimate grievance. My object in rising is to request the noble and learned Viscount on the Woolsack to ask the Treasury to bear this point in mind, and if unable to adjust it now during the war, then to deal with it the moment the war is over.
§ THE LORD CHANCELLORMy Lords, by leave of the House, I will give a short answer to the noble Earl. He gave me notice, and I would deal with the matter further if I possibly could. It is essentially a Treasury and financial matter, and it is a matter to which I had my attention drawn when I held a different office. I should be glad to take the opportunity of calling the special attention of my right honourable friend the Chancellor of the Exchequer to what the noble Earl has said.
§ On Question, Bill read 3a, and passed.