Let us understand each other. This money was borrowed by the State at a shade over 3½ per cent. The State is now charging the local authorities engaged in building houses and making sewerage and water works 1¼ per cent. over that rate. When I mentioned that the Minister was in a position to borrow on Exchequer Bills at a low rate of interest, a fraction over 2 per cent., I wanted to emphasise that over a period—since the Minister took up office, if you like—the rate of interest has been much below what he now proposes to charge local authorities. Taking the long or the short view, one has no right to forestall in this matter. Last night we heard condemnation of business people who, with a certain amount of foresight, purchased goods. The Minister thought they were committing a grievous wrong by escaping certain taxation. If the Minister looks up the authorities of the Catholic Church in connection with interest charges, he will find that the usurer comes in for very strong condemnation. Taking the long or the short view, it is now possible to borrow money at a fraction over 3½ per cent. A rate of 3¾ per cent. would be a rather elaborate or extravagant estimate of the price which should be paid. The Minister is charging 1 per cent. over that. What are the costs that might be charged against the sending out of this money? Is there provision for loss? Is that what the 1 per cent. extra is charged for? Surely it is not going to be argued by the Minister that the clerical charges in connection with the advancing of this sum of money will amount to 1 per cent.
Notwithstanding all the subsidies, grants and allowances made to local authorities in connection with house-building, the rents being charged for these houses are beyond the capacity of the people. The report which was issued a short time ago by the Commission set up by the Ministry to inquire into the feasibility of selling labourers' cottages disclosed one outstanding fact. The rent charged is 1/2. The contributions from the rates amount to 1/3½; State subventions about 8d. These cottages were built within the last 30 years and the last of them was built about ten years ago. The price of building was then much lower than it is now. The interest charged then amounted to £2 1s. 7d. and principal and interest were repayable by an annuity spread over 68½ years. Is it put forward as a constructive proposition that, having regard to the high cost of building, local authorities can show any sort of proper balance-sheet while paying 4¾ per cent.? I am prepared to admit at once that the advancing of this money does cost something, but ½ per cent. would be perhaps an extravagant charge in the circumstances. I do not think that, even when money was costing over 5 per cent., the rate charged to local authorities exceeded 5¾ per cent. In this case, the Minister is charging 4¾ per cent., taking, as he says, the long view. During the last two years he has raised money on Exechequer bills at something over 2 per cent. He raised £6,000,000 of a National Loan at a shade over 3½ per cent. In these circumstances, to justify the charge to local authorities of 4¾ per cent. requires some greater explanation than a reference to the long view. If, in a year or two or three years another National Loan has to be floated at a higher rate of interest it will be time enough to charge the extra price. On the 1st April the sum of money in the Treasury amounted to about £5,000,000 and the Minister told us that there was some money in the Local Loans Fund, which cost him not a penny in interest. He got in 1932-33 £550,000 and in 1933-34 £550,000 from the taxpayers, levied in taxation, on which no interest has been paid by him. That is to be lent now to local authorities at 4¾ per cent. They are to be taxed first to get £1,100,000. Having done that, the Minister says that the local authorities, which are struggling against the high cost of building, are to be charged 4¾ per cent. That does not appear to me to be a sound or just proposition and I think that the Minister would be well advised to reconsider it.
