§ Mr. E. Fletcher
asked the Financial Secretary to the Treasury if he will circulate in HANSARD his recent communication to the local authorities regarding loans from the Public Works Loan Board.
§ Sir G. Hutchinson
asked the Secretary to the Treasury whether he will circulate in HANSARD a copy of the memorandum recently sent by the Treasury to the associations representing local authorities in connection with the Government's decision not to renew Section 1 of the Local Authorities Loans Act, 1945.104W
§ Mr. Boyd-Carpenter
Yes. The text of the memorandum sent to the Associations representing local authorities is as follows:
- 1. The programmes of local authorities, undertaken in accordance with Government policy, particularly in connection with housing, will continue to require capital expenditure on a large scale. It is therefore intended that the authorities should continue to be given full access to the sources of finance for meeting approved commitments.
- 2. Since 1945 the Local Loans Fund has been the main source of new money for local authorities, supplemented to some extent by recourse to internal funds and by borrowing on mortgage otherwise than from the Public Works Loan Board. In the view of the Government the time has now come to extend the sources from which money can be found. It is therefore proposed to allow Section 1 of the Local Authorities Loans Act 1945 to lapse at the end of December, 1952. The direct effect of this step will be twofold; it will allow authorities to add the stock market to the sources of their finance, and it will allow them to negotiate loans on mortgage, otherwise than from the Public Works Loan Board, to the full extent for which they have authority to borrow, subject to the terms of the Control of Borrowing Order precluding borrowing for terms of less than seven years except where the loan sanction is for a shorter term.
- 3. The Fund will continue to provide, on the same general lines as at present, for the approved requirements of the great majority of local authorities. But some of the large authorities will be invited to consider the extent to which they can finance their needs from issues of their own stocks in the market.
- 4. The selection of authorities who may be expected to be able to borrow in the stock market, and the timing and amount of such loans, are matters which the Government will be glad to discuss with the local authorities concerned. But there will also be various questions to settle which will be of concern to local authorities in general, and your Association is invited to decide whether such consultations should be conducted with representatives specially appointed for the purpose or through the Local Authorities' Standing Committee.