HL Deb 07 May 1991 vol 528 cc45-6WA
Lord McColl of Dulwich

asked Her Majesty's Government:

What action they propose to take in the light of the recent judgment by the House of Lords in the case of Hazell v. the Council of the London Borough of Hammersmith and Fulham that interest rate swaps and similar dealings are ultra vires local authorities.

Baroness Blatch

My center honourable friends the Chancellor of the Exchequer and the Secretary of State for the Environment have given careful consideration to the implications of this judgment. The Government have received a number of representations favouring a variety of different schemes of legislation to enable local authorities to make payments under past arrangements which have been found to be unlawful. The Government have concluded, however, that it is best not to seek to alter the existing legal obligations of the parties to these arrangements.

As the Government have already made clear, there is specific legislation enabling local authorities to borrow money and protecting those who lend to local authorities. This legislation was not in issue in the recent litigation on interest rate swaps.

Baroness Blatch

Government support for city technology colleges once they are in operation is given by means of recurrent grant. The amount of recurrent grant aid paid to each established city technology college in each of the financial years since they were established is as follows: