§ Sir Trevor SkeetTo ask the Secretary of State for the Environment whether he will make a statement in the light of the House of Lords' judgment on local authority interest rate swaps.
§ Mr. HeseltineThe House of Lords' judgment concerns local authorities' powers to undertake interest rate swaps and similar business. The Government are considering the implications of the judgment.
The statutory powers of local authorities to borrow money, and the protection provided by legislation to those who lend to local authorities, were not in issue in the Hammersmith and Fulham case. The legislation provides that a person lending money to a local authority does not have to ask whether the authority has power to borrow the money and the lender is entitled to repayment of the loan, together with any interest thereon, regardless of whether the borrowing was within the authority's power or not.