I beg to move, in page 22, line 34, at the end, to insert:
The purpose of this Amendment is to make it possible for the borrower to repay the local authority by either of the methods suggested in subsection (3, c) which states:"the local authority shall make provision whereby either form of repayment of the advance under this section shall be available."
Many local authorities at present lay it down that the repayment must be by instalment of principal, the effect of which is of course, to make the repayments commencing at a high level gradually decreasing. We think that is bad because it tends to discourage people from taking advantage of the facilities offered for borrowing money from the local authorities. It discourages them because people taking loans usually are unable to make the higher payments at the beginning of their tenancy as they probably have to furnish and decorate the house. This considerable expenditure often prevents them from making the higher payments."the bond and disposition or assignation in security may provide for repayment being made either by instalments of principal or by an annuity of principal and interest combined so, however, that in the event of any of the conditions subject to which the advance is made not being complied with, the balance for the time being unpaid shall become repayable on demand by the local authority and that the said balance may, in any event, be repaid at any term of Whitsunday or Martinmas by the debtor after one month's written notice of intention to repay has been given to the local authority."
I beg to second the Amendment.
I am sorry, but we cannot accept this Amendment. I appreciate the point the hon. Gentleman has raised. Actuarially it works out much the same financially at the end of the day for the borrower, though it may be more convenient in a particular case to have one form of repayment in preference to the other. Traditionally, and in practice, it is usual for the lender to determine on what terms the repayment will be made. Even if we were to depart from that principle the Amendment would not have the effect which my hon. Friend is seeking. The Clause provides that the local authority "may" make these loans. It is not imperative on the local authority to make these loans, nor can it be made imperative. That means that there is an option in a particular case whether they are prepared to make a loan. If it is an optional matter for the local authority, then if the Amend- ment were incorporated to give the borrower the right to determine what method of repayment he wishes to make, a local authority, if so minded, could say to a borrower, "If you want a loan on one form of repayment we will exercise our discretion and not grant the loan." They could get round it that way very simply, so that the Amendment would not achieve the object the hon. Member desires.
While we do not suggest that the wording is good—we are not lawyers—will my right hon. and learned Friend consider that this is not a case of a private loan by a private individual. It is a case of a community providing a facility for a private citizen. Surely that rather alters the legal principle.