§ Mr. Gryllsasked the Chancellor of the Exchequer, further to the reply given to the hon. Member for Surrey, North-West, on 8th June, (Official Report, Volume 912, column 666) by the Financial Secretary, how much of such foreign currency borrowing carries a guarantee by the borrowers themselves against exchange loss on repayment; what the total cost would be of implementing the guarantee if all such loans were to be repaid now; and whether the cost of meeting such guarantees in the case of local authorities would fall on the ratepayers.
§ Mr. Robert SheldonOn the first part of the hon. Member's Question, all loans denominated in foreign currency must be repaid in foreign currency; the borrower's signature to the loan agreement therefore constitutes a guarantee against exchange loss by the lenders.
On the second part, I have nothing to add to my reply of 8th June.
On the third part, where the borrowing is under the central Government exchange cover scheme, any additional sterling cost arising from a change in exchange rates will fall on the Exchange Equalisation Account; but where the borrowing is not under that scheme, any additional cost will have to be met from the local authority's revenues, whether from central Government grants or from rates.