§ 67. Mr. Jay
asked the Chancellor of the Exchequer why it remains his policy to continue to base the interest rates charged by the Public Works Loan Board upon the current rates for comparable loans in the market, in view of the fact that a lower interest rate is charged on Government loans of a similar type to building societies.
I see no reason why a local authority borrowing from the Public Works Loan Board should pay less for its capital than a local authority borrowing on the market. The rate of interest on loans to building societies is not fixed but is liable to variation during the life of the loan. In such circumstances, no true comparison can be drawn between the cost of borrowing by building societies 35W and local authorities by reference to the differing rates of interest currently charged.