§ Mr. Knoxasked the Chancellor of the Exchequer whether he will list all foreign currency facilities available to each public sector body that has arranged such a facility, and the state of the drawings under each facility.
§ Mr. DellBritish Airways have established lines of credit in the United States of America to enable them to complete specific purchases of United States aircraft. Of the two most recent borrowings, of US$2.7 million and US$95.7 million, some $1.6 million and $54.2 million respectively have been drawn so far. The
OVERSEAS LOANS BY PUBLIC SECTOR BODIES OCTOBER-DECEMBER 1975 Date Borrower Amount (million) October … … … … National Coal Board … … … … Sw. fr. 25.0 November … … … … British Gas Corporation … … … U.S. $ 100 National Coal Board … … … … U.S. $ 18.15 British Steel Corporation … … … U.S. $ 35.42 National Water Council … … … U.S. $ 9.2 DM 15.9 National Coal Board … … … … Sw. fr. 26.14 December … … … … British Gas Corporation … … … U.S. $ 20 British Steel Corporation … … … U.S. $ 21.2 DM 18.5 Sw. fr. 14.0 £0.9 British Steel Corporation … … … Sw. fr. 23.9 British Gas Corporation … … … U.S. $ 25 National Water Council … … … U.S. $ 400
§ Mr. Knoxasked the Chancellor of the Exchequer what was the cost in 1974–75 to (a) central Government and (b) the rest of the public sector of (i) interest charges on foreign currency borrowing and (ii) debt service payments on foreign currency borrowing.
§ Mr. DellForeign currency borrowing by the central Government consists of various long-term loans, mainly dating back to the Second World War, and Her Majesty's Government $2.5 billion loan from the clearing banks. During 1974–75, payments of interest and principal on the long-term debt were equivalent to $99 million and $197 million respectively. Her Majesty's Government loan was drawn in the latter part of 1974–75 and, because of the timing of drawings, interest payments in that year were only some $30 million. In a full year interest payments reflect market interest rates; at current rates, annual interest payments would be approximately $190 million.
710Wremainder will be drawn as needed for the purchase of the aircraft. Other borrowings of this kind outstanding, all of which have been fully drawn, amount to some US$161.6 million.
I am unaware of any similar facility arranged by any other public sector body. However, loans in foreign currencies have been arranged centrally for public sector bodies for investment in the United Kingdom. A list of outstanding loans until the end of September 1975 was placed in the Library of the House on 14th October. Further loans have been raised since then. Following is a list for the period between end-September and the end of the present Session.
Foreign currency borrowing by the public sector at present totals some $7.2 billion. Repayments of principal during 1974–75 were $7 million. Precise information on the total of interest payments in that year is not readily available: but at current interest rates, these interest payments are running at an annual rate of about $600 million.
§ Dr. Reginald Bennettasked the Chancellor of the Exchequer whether there is any effective upward limit on the total borrowing by the public sector from the United Kingdom banking sector.
§ Mr. DellNo. An acceptable level of total borrowing by the public sector from the banking sector depends on overall economic circumstances. It is our policy to finance a significant proportion of the borrowing requirement by sales of debt to the non-bank public.