HC Deb 12 December 1974 vol 883 cc753-4
20. Mr. Ridley

asked the Chancellor of the Exchequer what guarantees he has given of repayment terms of overseas borrowings; and for what amounts.

Mr. Dell

The total of overseas borrowings under Treasury guarantee since March 1974 is £680 million, at the rates of exchange at the dates of the borrowings. With permission, I shall circulate details of the amounts raised by individual borrowers in the OFFICIAL REPORT.

Mr. Ridley

Does not the recent Aramco affair show that people will increasingly demand repayment in dollars of our overseas borrowings? Are the Government aware that this will place a shackle on our future, which we may never be able to discard in view of the impending weight of debt which the Government must incur? Will the right hon. Gentleman therefore take steps to reduce our dependence on overseas borrowing and give an assurance that he will seek to do all possible to borrow free from guarantee of any dollar repayment terms?

Mr. Dell

We shall do what we can to reduce the amount which this country has to borrow. To try to cover the balance of payments deficit in the short term would have serious results. The foreign exchange markets reacted in too alarmist a way to reports about the currency in which payment for oil is to be made to Saudi Arabia. It is not the currency of payment so much as the investment policies of the Government concerned that we must consider. It would be quite wrong to conclude from reports of changes in arrangements with the oil companies operating in Saudi Arabia that the producing Governments have changed their investment intentions.

Mr. Skinner

Does my right hon. Friend accept that one of the reasons why there is a great deal of despair in the international trading market at present, especially with regard to the £ sterling, is that it can be seen not only that we are to some extent mortgaging our North Sea oil, but also that, according to the latest communiqué from Brussels, even that amount of our oil which is not already mortgaged will go into the hands of the Common Market partners?

Mr. Dell

There is no question of mortgaging our North Sea oil. It will remain under the entire control of the British Government.

Following is the information:

Sterling equivalent of amounts borrowed at the dates of borrowings (£ million)
British Steel Corporation 188.2
Electricity Council 41.7
National Coal Board 18.7
National Water Council 173.2
North of Scotland Hydro Electric Board 6.2
Post Office 208.9
South of Scotland Electricity Board 43.1