§ Mrs. Bainasked the Chancellor of the Exchequer what is his estimate of the comparative cost of loans made by the European Investment Bank to United Kingdom projects over the past two years, taking into account exchange rate costs and commercial borrowing rates.
§ Mr. Robert SheldonOver the past two years the European Investment Bank's nominal lending rate has varied between 8⅜ per cent. and 10½ per cent., while over the same period commercial bank base rates, to which most commercial borrowing in the United Kingdom is linked, have varied between 9½ per cent. and 14 per cent. United Kingdom base rates are currently 14 per cent. At present the bank's rates on loans comprising a mix of currencies are 8⅜ per638W cent. for loans up to eight years and 9 per cent. for loans over eight years. Most of the bank's loans in the United Kingdom have been made to public sector bodies, which are able to take advantage of the official exchange cover scheme.
Under this scheme the ultimate interest rate charged to the borrower on the non-sterling element of the loan tends to be about 1 per cent. below the comparable rate for borrowing in sterling from the National Loans Fund or the Public Works Loan Board. The balance of the interest rate differential then accrues to the Exchequer. It is for private sector borrowers to make their own judgment on the financial advantages of borrowing from the EIB, taking into account the exchange risk on the non-sterling element of any loan.
§ Mr. John Evansasked the Chancellor of the Exchequer how much money has been loaned to each non-assisted region of the United Kingdom by the European Investment Bank in each year since 1973.
§ Mr. Robert SheldonIn general, the policy of the European Investment Bank is to make loans which benefit the less-developed regions of the Community. The main exception to this is in the case of projects which benefit more than one member State of the Community. The only project in the United Kingdom. entirely situated in a non-assisted area, where the bank has given a loan on these latter grounds is the construction of the second Dartford Tunnel, for which a loan of £7 million was made available to the Kent and Essex County Councils in 1974.
The bank has also made a number of loans which in part benefit the non-assisted regions. These loans are listed in the footnote to the answer given in reply to another Question by my hon. Friend on this subject today.
§ Mr. John Evansasked the Chancellor of the Exchequer if he will list in the Official Report every project in the United Kingdom, region by region, that has had loans from the European Investment Bank, in each year since 1973; and what was the amount loaned and at what rate of interest to each project.
§ Mr. Robert SheldonFollowing is the information requested:
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Year Region Borrower Amount £000 Rate per cent Project/Sector 1973 Scotland … ICFC … 75 10½ Preparation of processed potatoes, Bo'n West Lothian for catering industry. Northern England … British Steel Corporation … 14,700 8½ Teesside iron and steelworks. Wales … British Steel Corporation … 14,700 8½ Llanwern iron and steelworks. Wales … ICFC … 200 10 Carpet manufacturers, Newport, Mon. 1974 Scotland … North of Scotland Hydro-Electric Board … 10,400 9½ Peverhead power station. Scotland … Lewis Offshore … 4,000 10½ Construction yard at Arnish Point, Hebrides for assembly of oil exploration equipment. Scotland … ICFC … 150 10½ Specialised plastic products, Glenrothes, Fife. Scotland … ICFC … 60 10½ Investment costing specialists, East Kilbride. Scotland … ICFC … 70 10½ Jig and tool makers, Glenrothes, Fife. Scotland … ICFC … 140 10½ Clothing, Galashields. Scotland … ICFC … 250 9½ Electronic and nuclear equipment, Edinburgh. Scotland … ICFC … 60 10½ Printing and publishing, Fife. Scotland … ICFC … 215 10½ Wholesale butchers, Bathgate, West Lothian. Scotland … ICFC … 52 10½ Weavers of Furnishing Fabrics, Galashields. 1974 Northern England … Electricity Council … 15,600 10½ Nuclear power station, Hartlepool. Northern England … ICFC … 50 10½ Integrated circuit control modules, Workington. North-West England … ICFC … 220 9¼ Sugar confectionery, Liverpool. Wales … British Steel Corporation … 8,000 10½ Port Talbot Steelworks. Wales … ICFC … 150 10 Furniture manufacturers, Glamorgan. Wales … ICFC … 50 10½ Heating, ventilating and hygiene equipment, Caerphilly. Yorkshire and Humberside … British Steel Corporation … 12,000 10½ Thryberg steelworks, near Rotherham. Northern Ireland … Short Brothers and Harland Ltd … 2,500 10½ Development of low-cost commuter aircraft.
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Year Region Borrower Amount £000 Rate per cent Project/Sector 1974 South-East … … … Kent and Essex County Councils 7,000 10½ Second Dartford Tunnel. 1975 Scotland … … … South of Scotland Electricity Board 15,600 9⅞ Hunterston B nuclear power station. Scotland … … … Distillers Company 12,000 9½ Whisky blending and bottling factory. Scotland … … … South of Scotland Electricity Board 7,800 9½ Hunterston B nuclear power station. Scotland … … … South of Scotland Electricity Board 10,000 9½ Power lines to connect Inverkip power station to transmission system. Scotland … … … North of Scotland Hydro-Electricity Board 10,000 9½ Power lines to connect Peterhead North power station to transmission system. Scotland … … … Shetland Islands Council 16,900 9½ Oil-tanker harbour at Sullom Voe, Shetlands. Scotland … … … Olivetti International 1,000 9½ British Olivetti typewriter factory, Glasgow. 1975 Scotland … … … ICFC 500 10½ Specialist engineering, Livingston. Scotland … … … ICFC 80 10½ Jersey knitters, Girvan. Scotland … … … ICFC 117 9½ Carpet industry, Ayrshire. Scotland … … … ICFC 100 9 Aluminium pigments, Leven, Fife. Northern England … … … Electricity Council 7,800 9⅞ Nuclear power station, Hartlepool. Northern England … … … National Water Council 7,500 9½ Kielder water scheme. Northern England … … … ICFC 372 9½ Cold forged bolts, screws and rivets, Co. Durham. Northern England … … … ICFC 80 9½ Machine tool manufacturing and general engineering, Newcastle. Northern England … … … ICFC 160 10½ Aluminium extrusion. Northern England … … … ICFC 125 10½ Manufacture of food colourings, Northumberland. Northern England … … … British Steel Corporation 17,500 9½ Installation of new coating lines at Shotton, North Wales.
Year Region Borrower Amount £000 Rate per cent Project/Sector 1975 Wales … ICFC … … 74 10½ Manufacturers and importers of needle bearings, Llanelli. Yorkshire and Humberside … Tate and Lyle … … 1,600 9½ Glucose factory at Goole, Yorkshire. Northern Ireland … ICFC … … 150 9½ Manufacture of industrial belting. 1976 Scotland … Post Office … … 17,300 9½ Development of telecommunications network. Scotland … British Steel Corporation … … 3,500 9 To expand capacity at Dalzell works, Motherwell. Scotland … ICFC … … 400 12½ Meat processing and market Aberdeenshire. Northern England … National Water Council … … 4,000 9½ Kielder water scheme Northumberland Northern England … Post Office … … 17,600 9½ Telecommunications. Northern England … British Steel Corporation … … 6,750 9 Expansion of Consett work. North-West England … National Water Council … … 9,000 9½ Water supply schemes. Wales … Electricity Council and CEGB … … 26,000 9½ Hydro-electric scheme at Dinorwic. 1976 Wales … ICFC … … 200 13 Manufacturers and retailers of wallpaper, fabric and women's clothine. Powys. Notes:
1. Not included in the above list are the following loans which cannot be classified on a regional basis either because the projects straddle regional boundaries or benefit all or most regions of the United Kingdom:
Year Borrower Amount £000 Rate per cent Project 1974 Elf Oil (UK) … … … 10,400 9⅞ Development of Frigg gas field in the North Sea. Total Oil (UK) … … … Aquitaine Oil (UK) … … … 1975 British Gas Corporation … … … 24,000 9¼ Natural gas pipeline system in Scotland and Northern England. British Gas Corporation … … … 23,600 9¼ Natural gas pipeline system in Scotland and Northern England. National Coal Board … … … 7,200 9½ Extension and modernisation of five coal mines in South Wales and Yorkshire. Post Office … … … 17,500 9½ Modernisation of Telecommunications in Wales and the Borders. British Railways Board … … … 6,300 9½ Construction of "merry-go-round" coal wagons. 1976 British Gas Corporation … … … 20,000 9½ Natural gas pipeline system in Scotland and Northern England. British Railways Board … … … 5,500 9½ Modernisation of shipping service between Holyhead and Dun Laoghaire. British Gas Corporation … … … 17,300 9 Pipeline to transmit North Sea gas from where it comes ashore in Norfolk to the South-West British Gas Corporation … … … 8,600 9 Pipeline to transmit North Sea gas from where it comes ashore in Norfolk to the South-West. British Railways Board … … … 11,600 9 Advanced Passenger Trains. North Sea, Inc. … … … 16,840 9½ Beryl Oil Field, North Sea. 2. The list includes projects financed from loans provided by the European Investment Bank to the Industrial and Commercial Finance Corporation (now Finance for Industry Limited) for on-lending to small and medium-sized firms in the assisted areas.
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§ Mr. John Evansasked the Chancellor of the Exchequer how much money has been loaned to each assisted region of the United Kingdom by the European Investment Bank in each year since 1973.
£000's Region 1973 1974 1975 1976 to date Scotland … … … 75 15,397 74,097 21,200 Northern England … … … 14,700 15,650 33,537 28,350 North West England … … … — 220 — 9,000 Wales … … … 14,900 8,200 74 26,200 Yorkshire and Humberside … … … — 12,000 1,600 — Northern Ireland … … … — 2,500 150 — In addition, the bank has made further loans in the United Kingdom totalling £169.04 million for which a precise regional breakdown is not available. The loans are listed in the footnote to the answer given to another Question by my hon. Friend on this subject today. The main beneficiaries of these loans are Scotland, Northern England and South-West England.