§ 38. Mr. H. Hyndasked the Minister of Transport and Civil Aviationby how much the estimate of £1,200 million for modernisation and re-equipment of British Railways will have to be increased on account of the new higher rates of interest.
§ Mr. Boyd-CarpenterNo such increase will be necessary.
§ Mr. HyndIs the Minister saying that this money will not be borrowed? If the money is borrowed, will there not automatically be an increase in interest charges?
§ Mr. Boyd-CarpenterI think the hon. Gentleman is confusing the amount of capital to be borrowed, which is what his Question relates to, with the servicing of the loan over the years. In so far as this measure is anti-inflationary it will, of course, tend to keep down the cost of re-equipment, not put it up.
§ Mr. HyndAs the Minister has stated the cost on the basis of present prices, which we can only assume will continue, is it not automatic that, because of the increase in the Bank Rate and the consequent increase in interest charges, there will be further cost on that account?
§ Mr. Boyd-CarpenterThe hon. Gentleman has asked me the cost on capital account. In so far as the change in the Bank Rate has effect, it should tend to diminish rather than to increase that. The hon. Gentleman is, I think, confusing the capital cost with the servicing of the loan, to which his Question does not relate.