PUBLIC WORKS LOANS (No. 2) BILL. (Hansard, 12 July 1948)

THE MINISTER OF CIVIL AVIATION (LORD PAKENHAM)

My Lords, I beg to move the Second Reading of this Bill. The purpose of the Bill is to authorise the National Debt Commissioners to issue to the Public Works Loan Board for local loans an amount of up to £500,000,000 until the passing of the next Act. It also provides that the Board may incur commitments within a comprehensive limit of £680,000,000. As your Lordships will observe, the Bill follows the pattern of its predecessors, and the need for it arises from the possibility of the powers under the existing Act being exhausted during the coming autumn. The current Act, passed last December, limited cash advances to £250,000,000, and the total of cash advances and commitments to £400,000,000. At the beginning of this month, the amount actually advanced under the current Act had reached £159,000,000. The great bulk of this amount was for housing purposes—it is impossible to estimate the precise figure, but three-quarters would probably be about the right proportion—while outstanding commitments stood at just over £181,000,000. The margin available to the Board is thus only just under £60,000,000 and there is a serious risk that this will not last beyond the early autumn.

690 As your Lordships will realise, precise estimation in this field is never possible. It is difficult to say with any degree of certainty how long the new powers are likely to last; but the Government expect that they should suffice until late in 1949, or perhaps a few months longer. I am assuming, as the Government assume, that future advances and powers will be roughly in line with those of recent times. Your Lordships are aware, too, that when it comes to a particular loan, the local authority have to secure the consent of the Government Department concerned and also under the Capital Issues Control, the agreement of the Treasury. Under the Act of 1945, and until the end of 1950, local authorities are obliged, subject to certain exemptions, to borrow from the Board. That, of course, is in order to avoid competition between the central Exchequer and the local authority. This Bill is a simple and necessary part of the machinery for ensuring that the money required by local authorities for housing and other essential purposes is made available without delay. I will do my best to answer any question that may be raised on the Bill. I beg to move that it now be read a second time.

LORD CLYDESMUIR

My Lords, possibly it is because I have had to move a similar Bill in another place, in other years, that I have been asked to make a few brief remarks on this occasion. As the noble Lord said, it is a piece of necessary machinery. We might, perhaps, observe that the Bill is somewhat early in time, because the present provision is net yet exhausted and might have lasted at any rate until the early autumn Session. We shall not quarrel about that, however; we do not want to have too much extraneous business during that special Session. The Act of 1945 concentrated borrowing on the part of local authorities through the Public Works Loans Commissioners, and there are critics of that procedure. There are some who would prefer the old method. Perhaps it is too early to say how this new procedure is going to work. I see the merit of avoiding unnecessary competition between local authorities when they are seeking money and possibly the noble Lord may have some views as to how the system is working. I should like 691 to pay tribute to the twelve unpaid Commissioners—men of high ability—and to express the hope that the Treasury will regard them as an independent body and not just as a "rubber stamp." Possibly the calibre of the Commissioners is the best guarantee that that will be so.

This total of £500,000,000 cash and £680,000,000 including commitments is a considerable sum, and it is being spent by the local authorities of this country on social services arising from a code which is not the work of one Party. The social services code has been built up by all Parties, and we are anxious to see that it should be fully implemented; and I note that housing accounts for about three quarters of the requirements of the local authorities. Looking to the future, those of us who sit on these Benches are anxious, because capital does not fall like manna from heaven; it has to be produced, saved or earned. We see one industry after another subjected to the great experiment of nationalisation (I will not be contentious), and a new range of individuals whose incomes for this year are extinguished and whose savings are trenched upon. We therefore feel some anxiety as to whether, in the future, capital will be available for the social services as it has been in the past. However, that is a story for another day, and I leave it there. I have no further comment to make on this necessary measure.