§ 18. Sir C. Osborneasked the Chancellor of the Exchequer why he is repaying before the due date international loans which cost only 4 per cent. with hot money on which Great Britain pays 6 per cent.; and how much hot money he estimates has flowed into London during 1967.
§ Mr. CallaghanThese repayments are being made as a result of the improvement in our reserves, and the strengthening of both our capital and current accounts. Overseas balances have been rebuilt, but not to a level which is in any way exceptional by past standards.
§ Sir C. OsborneBut why should the Chancellor before the time is due repay a debt which he borrowed at 4 per cent. with hot money on which he is paying 6 per cent.? Why waste 2 per cent. extra of taxpayers' money?
§ Mr. CallaghanThe hon. Gentleman does not seem fully to understand that money will come here whether I repay the debt or not. We are saving the 2 per cent., or whatever is the appropriate rate of interest, by repaying it earlier.