Clause 1 - Power to borrow
Local Government Bill
9:15 am
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
As the Minister said, the clause is not highly controversial. Its intention is to restate the power of local authorities to borrow for a purpose that is relevant to any of their functions and to elaborate that they may also borrow for the purposes of prudent management of financial affairs—that is to say, to borrow in the course of normal Treasury operations.
The relevance of my question to the Minister will become clearer when we discuss clause 2 and amendment No. 26. Has it been established that there is no power at present to borrow for normal Treasury operations? By that, I mean short-term borrowing for prudent management of financial affairs. The explanatory notes do not make it clear, but it may have been established by the courts, for example, that no such power exists. I should be grateful if the right hon. Gentleman could explain why the Government have found it necessary to elaborate that specific power under the Bill.