HC Deb 19 July 1962 vol 663 c83W
54. Mr. Callaghan

asked the Chancellor of the Exchequer What is his policy about the financing of Local authority borrowing by foreign deposits on short-term loan; and what is the effect on sterling of such borrowing.

Mr. du Cann

Government policy is that local authorities should borrow in the market wherever they can do so at reasonable rates. Where such borrowing is financed by foreign funds it would, at the time the inflow takes place, tend to improve the rate for sterling and increase our reserves, but would also correspondingly increase our short-term Liabilities.