HC Deb 25 November 1969 vol 792 cc192-3
27. Mr. Ridsdale

asked the Chancellor of the Exchequer what is the total of foreign borrowing by the nationalised industries to 1st November or the latest convenient date, and that of local government authorities, which he has authorised; and how much of this is in deutsche marks.

Mr. Diamond

To 1st November nationalised industries have borrowed about £88 million abroad and one local authority about £5 million. Some £64 million is in Deutsche marks.

Mr. Ridsdale

When has this debt, which totals £100 million, to be repaid? How much has the total interest to be paid been altered by the revaluation of the Deutsche mark?

Mr. Diamond

The total additional cost has already been given in an answer, but I can repeat that the additional cost to the public sector is broadly equal to the additional benefit accruing from the reduction in the rate of interest.

Mr. Turton

Will the right hon. Gentleman take into consideration the burden which this will place on our overseas invisible account in the future? Will he and the Chancellor of the Exchequer look into the whole question of public corporation and local authority borrowing which at the moment amounts to £2,000 million a year?

Mr. Diamond

I have already explained that the two items are broadly in balance. The net result, therefore, is that we have replaced short-term borrowing with long-term borrowing of the same amount, and that surely is advantageous.

Mr. Alison

Does the Chief Secretary appreciate that this form of borrowing has the result of increasing the domestic money supply? Is this held to be an advantage or a disadvantage of the scheme?

Mr. Diamond

It is one of the elements of the scheme which has been fully taken into account. Overall the scheme was thought to be, and has proved to be, advantageous.

Mr. Barnett

Will my right hon. Friend bear in mind that it is nothing like the burden which has arisen from the net capital outflow which has restricted our economic growth over the years?

Mr. Diamond

I will gladly bear in mind anything my hon. Friend puts to me