Orders of the Day — Public Works Loans Bill

Part of the debate – in the House of Commons at 12:00 am on 12 November 1952.

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Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North 12:00, 12 November 1952

I know, Mr. Deputy-Speaker, but I think we all agree with your predecessor that we may now say something about this today, but, of course, our full rights to discuss it on the Expiring Laws Continuance Bill itself are still preserved.

If the Financial Secretary were doing no more, as he claims, than giving local authorities extra freedom, and taking no facilities away from them, he might make his action appear plausible. Indeed, what he said, I think, was that his purpose was to "expand" the facilities which were open to the local authorities for borrowing. But even so, I should like to ask him, as did my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), whether, before reaching this decision, he studied the very cogent defence of the Local Authorities Loans Act, 1945, which was made by Sir John Anderson, the then Chancellor, on 24th January, 1945, for introducing this system by which all local authority loan finance was canalised through the Public Works Loan Board and away from the so-called free market in the City.

Sir John Anderson then said that the local authorities' programmes must be financed in an orderly manner, and as cheaply as possible. There must be no scramble between competitors for capital, and everything must be done that is necessary to maintain effectively the Government's cheap-money policy."—[OFFICIAL REPORT, 24th January, 1945; Vol. 407, c. 908.] That was his defence of this compulsion, which the hon. Gentleman is now sweeping away.

Are we to understand that the present Government have abandoned Sir John Anderson's objective, not merely of cheap borrowing by local authorities—and that is fairly evident—but orderly borrowing as well? Are they really wanting to go back to what Sir John Anderson described then as a scramble? We ought to have that made quite clear.

What we fear is that there is more in this change of policy than the Financial Secretary told us this afternoon. We want to know whether the Government are, here again, giving way to those interests in the City which, of course, have made a lucrative business out of this in the past. We can mention some of those incidents later. The Financial Secretary said that he was doing nothing of the kind, and that what this arrangement in these two Bills would do—if I am in order in referring to them both—was not to "exclude" the local authorities from the City. But this is not what is being said by financial writers in the Tory Press. We have noticed before that the real intentions of the Government sometimes reach us from the Press, and not in the first instance from the Front Bench opposite.