HC Deb 17 February 1976 vol 905 cc609-10W
Mr. David Howell

asked the Chancellor of the Exchequer whether, and in what circumstances, public or publicly guaranteed lending to companies which are or will be under the control of the National Enterprise Board, or which are in receipt of direct assistance from the Department of Industry, is classified as a liability when determining the size of the public sector deficit; and whether private ownership of the shares of the companies in question does or can affect the classification adopted.

Mr. Joel Barnett

Though the National Enterprise Board is a public corporation within the public sector, companies under its control are included along with other companies in the private sector for statistical purposes. Loans to them are therefore part of public expenditure, and contribute to the public sector borrowing requirement—though not to the financial deficit, from which, like all lending and other financial transactions, they are excluded. This classification is not affected by private ownership of shares in the companies. The provision of a Government guarantee on company borrowing does not constitute public expenditure.