§ Mr. Hooleyasked the Chancellor of the Exchequer what was the interest rate on borrowing for industrial investment in each of the nine members of the EEC, and in the United States of America and Japan during September 1975.
§ Mr. Joel BarnettThe rates at which major banks lent to industrial prime borrowers are given in the table below. Interest rates on loans for industrial investment vary considerably according to the status of the borrower, the viability of the project and the life of the loan. The rates shown applied to short-term loans to first-class customers only. Allowance has been made for any additional charges or maintenance of minimum balances normally required of borrowers by banks in the countries concerned.
Country Average September Rate Per cent. United Kingdom 11.0 Germany 7.63 France 10.85 Italy 14.5 Netherlands 7.5 Belgium-Luxembourg 90 Ireland 10.75 Denmark 12.5–13 U.S.A 9.87 Japan 7.75
§ Mr. Hooleyasked the Chancellor of the Exchequer if he will publish in the Official Report a note on subsidies, subventions or other techniques used in 583W the United Kingdom and in each of the other member States of the EEC, to reduce the interest charges on capital borrowed for industrial investment by private or public corporations.
§ Mr. Joel BarnettThe only subsidy which reduces interest charges on capital borrowed for private industrial investment in the United Kingdom is the interest relief grant available under Section 7 of the Industry Act 1972 for employment creating projects in the assisted areas.
There is no subsidy element in the terms on which the public corporations borrow from the National Loans Fund, their only domestic source of long-term finance for investment.
Preferential interest rates are only one facet of industrial assistance which takes different forms in different countries. Interest rates vary in any case with the status of the borrower, the type of investment, length of loan and financing customs of the country concerned, and a direct comparison of subsidies, even if it were available, would have little significance of itself. A comparison of the known financial mechanisms in EEC countries is published in "Finance for Investment" (NEDO May 1975).