Municipal Borrowing.

Oral Answers to Questions — Scotland. – in the House of Commons at on 7 February 1939.

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Photo of Mr Thomas Kennedy Mr Thomas Kennedy , Kirkcaldy District of Burghs

asked the Chancellor of the Exchequer whether he has considered representations by Scottish local authorities regarding recent alterations made by the Bank of England in the conditions governing the issue of corporation bills; that the said alterations will impose on ratepayers a heavy burden of increased interest expenditure in connection with borrowings for municipal purposes prior to the completion of rate collection; and whether he proposes to take any action to deal with the fact that only a small minority of the largest authorities will be able to continue the issue of bills?

Photo of Mr John Simon Mr John Simon , Spen Valley

I understand that no such representations as those referred to in the question have been received. The position is as follows: The Bank of England recently decided to accept for discount, and as security for advances, approved Money Bills of local authorities to whom Parliament has granted specific and limited powers to borrow by such Bills. This decision, in fact, represents not a restriction but an extension of these facilities so far as Scottish local authorities (other than Glasgow) are concerned. Such facilities at the Bank of England had previously been restricted to four authorities in all, of whom the only Scottish authority was the Corporation of the City of Glasgow. The right hon. Member's question presumably refers to the effect on those Scottish local authorities, who do not possess specific powers of the kind f have mentioned, of the recent decision of the London Clearing Banks and of the Scottish Banks not to accept municipal bills as security for money market loans unless eligible for discount at the Bank of England. I do not think it would be proper for me to intervene with those bodies on a matter which is clearly within their discretion in the conduct of their business.