Public Works Loan Board (Interest Rates)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 9th March 1965.

Alert me about debates like this

Photo of Mr Simon Digby Mr Simon Digby , West Dorset 12:00 am, 9th March 1965

asked the Chancellor of the Exchequer what representations he has received as a result of his decision to raise the interest rates of the Public Works Loan Board as from 20th January; and what replies he has sent.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

I have received three letters about this increase. In reply I have explained that only the rates for last-resort loans from the Public Works Loan Board were raised.

Photo of Mr Simon Digby Mr Simon Digby , West Dorset

I recognise that the two-tier system gives some help, but will the Chancellor accept that people are not pleased, even if he has received only three letters, and will he give an undertaken that, when he is able to reduce the Bank Rate, there will be a reduction in this very high rate?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

I was not pleased with having to raise the Bank Rate, but it was an essential part of the short-term defences which had to be raised. As to the level of Public Works Loan Board interest rates, I should be ready to review these at any time.

Photo of Mr Julian Snow Mr Julian Snow , Lichfield and Tamworth

Is my right hon. Friend aware that many local authorities are extremely grateful for the improved availability of finance through the Public Works Loan Board?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

I am much obliged. Perhaps I may add that, although in some quarters this has been dismissed as rather small help, over £90 million has been advanced in loans since November to about 290 authorities.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

But is not the Chancellor aware that this added access to the Public Works Loan Board is available only to boroughs and towns which are not borrowing more than £500,000 and that the vast majority of authorities in the larger boroughs are suffering because they have had no improved access to the Board and their rates of interest are vastly increased in contradiction of the promises of the party opposite before the election?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

The hon. Gentleman is anticipating Question No. 32, but, if he is impatient about a reduction in long-term interest rates, I can tell him that this Government still have four years and seven months of their life left to run.