§ 21 and 22. Mr. Beswick
asked the Chancellor of the Exchequer (1) why, in view of his recent removal of credit restriction, and in view of the fact that the Government have complete control of the volume of capital works undertaken by local authorities, he still retains such high rates of interest for loans from the Public Works Loan Board;
(2) why, in his recent downward revision of interest rates on loans from the Public Works Loan Board, he retained the same rate of interest for loans of 15 years and over; and, in view of the fact that the great majority of house mortgage advances are for periods over 15 years, if he will now reduce the interest rate for loans for this period.
The rates of interest on local loans are kept broadly in line with the rates at which local authorities can borrow in the market. Recently it became appropriate to reduce the rates for loans up to 15 years, but not the long-term rate, in order to maintain this broad parity. The purpose for which loans are raised is not relevant to the rates of interest, but these are constantly under review and will be revised again when necessary.