HC Deb 26 November 1979 vol 974 c503W
Mr. Austin Mitchell

asked the Chancellor of the Exchequer what is the amount of short-term credit likely to be affected by raising the minimum lending rate; what is the estimated annual cost to borrowers of the increase of 10 percentage points in the minimum lending rate since 1977; and what is his estimate of the breakdown of this additional cost by type of borrower, specifying in particular manufacturing industry and wholesale and retail distribution.

Mr. Lawson

The calculation that is requested would depend on total credit outstanding from banks and other sources and the proportion that was short term. It would be critically affected by the tax position of individual borrowers, the extent to which the interest rates on borrowing were fixed or variable, and the effect of inflation on the value of assets purchased with the loan. A sectoral breakdown of these factors would also be required. Since much of this information is not available, it is not possible to provide the figures requested.