§ 75. Mr. PATTINSON
asked the Minister of Agriculture whether he is aware that the land purchased for allotments in 1921 was paid for out of loans raised at 6¼ per cent. interest and repayable in 50 years; that, in consequence of these terms of borrowing, the allotments cannot be let at a lower rent than about £6 per acre; and that, owing to these rentals, allotments cannot be made to pay, and there is a risk that these allotments will become a heavy charge upon the parishes in which they are situated; and whether, in these circumstances, he will take steps to have the rate of interest reduced?
§ Mr. BUXTON
The answer to the first part of the question is in the affirmative. I am informed by the Treasury that it is impossible to reduce the rate of interest on loans made by the Public Works Loan Board. The rate charged depends on the rate at which the money can be raised. Any reduction would involve loss 1549 to the Local Loans Fund, which has to pay interest to holders of Local Loans Stock raised at the then market rates. The rate of interest on money borrowed for the purchase of land for allotments at the present time is 4¾ per cent., and the maximum period of repayment is now 80 years. The rent per acre must obviously depend not only on the rate of interest but also on the purchase price of the land. A rent of £6 per acre such as is mentioned by the hon. Member would represent a purchase price of about £80 per acre, and for land of this value a rent of 9½d. per pole for allotments would not be considered an excessive rent in an urban district, although it is no doubt higher than the usual charge in a rural district.
§ Mr. PATTINSON
Is the right hon. Gentleman aware that some of these allotments have been given up on account of the high rates changed, and does he consider that such rates of interest charged over 50 years are likely to encourage small holdings?
§ Mr. BUXTON
This has occurred in some cases, but the Act of 1922 laid down that the rent must cover the expenses, with certain important exceptions.
§ Mr. T. JOHNSTON
Is it not the case that working class money only gets 2¾ per cent. on deposit in the Post Office or other trustee savings banks and why cannot this money be offered for purposes of this kind at that low rate of interest?
§ Viscount WOLMER
Can these rents be taken as an example of the rents payable when the land of England is nationalised?