§ Mrs. Bainasked the Chancellor of the Exchequer what is the total cost to public funds of the increased sterling repayment position of loans incurred abroad by public authorities in the United Kingdom over the last two years.
§ Mr. Robert SheldonI assume that the hon. Member is referring to the foreign currency borrowing of the United Kingdom public sector under the exchange cover scheme whereby the Exchange Equalisation Account provides foreign currency for the repayment of loans at the same rates of exchange that were in force when the various loans were drawn down. There can be no cost to public funds in respect of the principal until loans are repaid, which in many cases will not be for several years, and the extent of any eventual net cost will depend on the exchange rates ruling at the time of repayment. But at present exchange rates the amount of borrowing 367W under the scheme over the last two years is equivalent to some £2.5 billion, compared with £2.1 billion at rates of exchange prevailing when the individual loans were drawn down.
§ Mr. Cleggasked the Chancellor of the Exchequer how many loans have been made to local authorities in the United Kingdom by overseas lenders which have to be repaid at the £ sterling rate existing at the time of the loans; and what is the total amount involved.
§ Mr. Robert SheldonI assume that the hon. Member is referring to the foreign currency borrowing of local authorities. All outstanding loans will be repaid in the currencies originally borrowed and for those loans under the exchange cover scheme public sector borrowers repay at sterling exchange rates prevailing when the borrowings were made.