§ Mr. Atkinsonasked the Chancellor of the Exchequer on what evidence he based his statement on 17th June, Official Report, column 714, that two-tier borrowing rates would give speculators and financial experts a chance of making uncovented gains at the country's expense.
§ Mr. Robert SheldonI can assure my hon. Friend that we have looked very closely at the possibility of a two-tier interest rate system. But there would be severe practical problems. Any system which offered non-residents the full range of securities at present available, but with a higher interest rate for non-residents than for residents, would tend to lead to lenders in the lower tier seeking to obtain the benefit of the higher tier rate and borrowers in the higher tier the benefit of the lower tier rate. It could also lead to higher interest rates being paid to nonresidents than would otherwise be the case.