2

THE NEW TOWNS

Inevitably, therefore, the higher rate of interest has led either to higher
rents, or economies in house and other construction, or both. Some of the
deficiencies in the New Towns can thus be laid directly at the door of the
Conservative Government.
Here, in a simplified form, is a statement of the capital advances made
to the Hemel Hempstead Corporation. It shows how the higher interest
rates have laid, for a term of sixty years, an additional charge on the
revenues and thus on the tenants of the New Town: —

Year
1947
. to
7th November, 195
8th November, 1951
. to
8th February, 1952
9th February, 1952
to
19th October, 1953
20th October, 1953
to
31st March, 1954

Rate

/{

339

»

3 YL

Advance

£2.912.200

£693.000

£7.622.800

£1,746,000

If the rate of interest had remained at 3 per cent., the annual interest
charge on the advances made up to 31st March, 1954, would have been about
£138,000, instead of £154,000, thus reducing the amount to be found every
year by approximately £16,000. And this additional amount has to be found
until the advances are paid back sixty years later. In round figures, this
means that merely for the advances between November, 1951, and March,
1954, while the Conservatives held office, an extra £960,000 has to be found
for interest from the revenue account over sixty years. And advances since
then have been given at 4 per cent. The New Town, like all public works.
pays for Tory monetary policy.
This table shows quite clearly that Hemel Hempstead, like other
Corporations, will have to carry the burden of these higher interest rates
for a long time to come—unless a later Government permits the conversion
of some. of these advances.

The rise in building costs cannot be discussed here. That rise has been
general, and has created similar problems for all housing authorities, just
as standards of building have been reduced generally in an effort to keep
rents within reasonable limits. I make only two comments. First, the
New Towns have been large-scale projects, in which very large contractors
have been concerned. Yet there does not seem to have been much economy
of scale, and it is widely believed in the New Towns that some sub-con-Building

 Costs