§ Mr. THOMAS RICHARDSONasked the Chancellor of the Exchequer whether the terms on which loans will be granted to local authorities or approved societies under the Housing (No. 2) Act, 1914, have yet been determined; if so, what these terms are; and when will the Treasury be prepared to advance money to local authorities?
§ Mr. LLOYD GEORGEIn view of the exceptional conditions now prevailing in respect of rate of interest and cost of building the Treasury will be prepared to make advances for schemes approved by them on the recommendation of the Local 945W Government Board or Board of Agriculture and Fisheries on the following terms:
Local Authorities.—Ten per cent. of the approved capital cost by way of free grant: the remaining 90 per cent. by way of loan with interest at 4¼ per cent. per annum, to be repaid by equal annual instalments of interest and principal combined within the period usually authorised for the works of the nature of those for which the loan is required. On a sixty years' loan the authority will thus pay for each £100 of approved capital cost an annuity of £4 3s. 4d.
Authorised Societies.—Advances will be up to a maximum of nine-tenths of the total approved capital expenditure. Such advance will consist of (1) a free grant of 10 per cent. and (2) a loan of 80 per cent. of such expenditure; the loan to be repayable by annuity (interest and sinking fund combined). If the loan is advanced for sixty years the annuity would be at the rate of 5 per cent. per annum, that is to say, for each £100 advanced by the Treasury the society will pay an annuity not exceeding £4 8s. 10d.
Where a scheme has been approved there need be no delay in making the advance; but it must be understood that the Treasury will only be prepared to approve schemes under the Housing (No. 2) Act in cases where unemployment in the building trade consequent on the War is exceptional and insistent and is not being provided for in other ways. These special terms have been arranged in view of the exceptional monetary conditions and the high cost of building materials now prevailing. As these conditions may change within a short time, it must be clearly understood that the terms are subject to alteration from time to time without notice, and that whenever new terms are fixed these will apply to applications under consideration at the time the alteration is made as well as to future applications.