HC Deb 19 March 1976 vol 907 cc664-5W
Mr. Patrick McNair-Wilson

asked the Chancellor of the Exchequer if he will publish details of all existing foreign loans to the nationalised industries and local authorities together with the additional cost to the Exchequer through the exchange cover scheme occasioned by the fall in the international value of the £ sterling.

Mr. Brotherton

asked the Chancellor of the Exchequer (1) if he will apportion to each nationalised industry and local authority the cost of the exchange cover scheme;

(2) what is the cost to public funds of the Exchange Cover Scheme.

Mr. Dell

; I assume that the hon. Member refers to outstanding overseas loans raised by nationalised industries and local authorities for domestic purposes, including those loans which carry an exchange cover guarantee.

A list of outstanding loans until the end of September 1975 was placed in the Library of the House of Commons on 14th October 1975. I will now arrange for a further list, covering the period from the beginning of October 1975 to the end of February 1976, to be deposited there.

All these loans are raised on the best possible terms, but any decision whether to publish details of a loan is for the parties to the loan agreement.

The sterling costs and benefits to the Exchange Equalisation Account of the exchange cover scheme depends upon the exchange rate between sterling and the various currencies borrowed at the beginning and at maturity of individual loans and the movement in sterling and overseas interest rates throughout the period of the loans. During the life of the loans the EEA benefits as the result of higher interest rates paid by the public sector borrowers. The cost to the EEA of the scheme consists of the increased sterling liability of the foreign currency borrowing, which at the exchange rates on 16th March totalled £4 billion, compared with £3 billion when the individual loans were negotiated. The assessment of any eventual net cost to the Exchange Equalisation Account can be completed only when a loan undertaken through this arrangement has been repaid.