Public Sector Borrowing (Hansard, 26 October 1976)

§ Mr. Grylls
asked the Chancellor of the Exchequer what is the total amount of foreign currency borrowings now outstanding by the nationalised industries, the Post Office and the local authorities, respectively; how much of this borrowing carries a guarantee by the Government against exchange loss on repayment; and what would be the cost of implementing the guarantee if all such loans were to be repaid now.

§ Mr. Robert Sheldon
I assume that the Question relates to foreign currency borrowings raised by nationalised industries and local authorities for domestic purposes. Following is the information about total foreign currency borrowing outstanding and the amounts which are covered against exchange loss on repayment as at end-September 1976:

Total amount outstanding
$ million
Amount carrying exchange cover guarantee
$ million

Nationalised Industries … 6,856.0 6,244.2

Post Office … 1,505.9 1,474.9

Local Authorities … 1,343.2 1,248.7

The sterling costs and benefits to the Exchange Equalisation Account of the exchange cover scheme depend upon the exchange rate relationship between sterling and the various currencies borrowed at the beginning and at repayment of individual loans and the movement in United Kingdom 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 when the loans are repaid.
If it were possible to repay all of the outstanding loans now the amount in the second column would be equivalent to some £5.4 billion, compared with £4.2 billion when the individual loans were negotiated.

§ Mr. Grylls
asked the Chancellor of the Exchequer whether, further to the Question of the hon. Member for Chingford (Mr. Tebbit) on 15th June 1976,
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Official Report column 102, he will list, expressed in sterling terms, the total sum of outstanding overseas foreign currency borrowings for each nationalised industry and for local authorities as a whole: (a) calculated on the basis of the exchange rates pre-

£ million at exchange rates prevailing at the end of the month when loans were taken out £ million at exchange rates at close on 15th October

Local authorities … … 540 810

National Coal Board … … 310 390

Electricity Council … … 1,050 1,500

South of Scotland Electricity Board … … 140 200

North of Scotland Hydro-Electricity Board … … 100 140

British Gas Corporation (and Gas Council) … … 400 570

Post Office … … 690 910

British Steel Corporation … … 470 610

National Water Corporation … … 590 690

British Rail … … 50 50

§ Mr. Forman
asked the Chancellor of the Exchequer what is the total amount of foreign borrowing that has been undertaken by the Government and by local authorities and nationalised industries with Government approval since February 1974; and what this represents on a per capita basis at the latest available date.

§ Mr. Robert Sheldon
The total amount of foreign currency borrowing by the United Kingdom public sector, including Her Majesty's Government, between February 1974 and end-September 1976 was equivalent to some £7.0 billion. This sum represents approximately £75 per head of the population.

§ Mr. Forman
asked the Chancellor of the Exchequer what is the total

NET BORROWING BY CENTRAL GOVERNMENT, PUBLIC CORPORATIONS AND LOCAL AUTHORITIES AND
PUBLIC SECTOR BORROWING REQUIREMENT (PSBR)

TABLE A

£ million

1969–70 1970–71 1971–72 1972–73 1973–74 1974–75 1975–76

Net borrowing from the overseas sector by:

Central government -1,355 -1,254 -2,052 1,224 -202 983 528

Local authorities 49 -42 120 197 404 73 -15

Public corporations 66 143 63 25 87 623 682

Net borrowing from the domestic private sector by:

Central government^* 453 1,275 2,636 760 2,389 4,141 † 8,279

Local authorities 485 599 440 397 1,159 2,117 1,306

Public corporations -223 122 -193 -105 595 -5 -169

Total=PSBR -525 843 1,014 2,498 4,432 7,932 10,611

^* of which, on—lent to:

Local authorities 563 711 861 968 1,000 1,114 1,150

Public corporations 913 922 1,137 1,194 502 1,466 2,110

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vailing at the end of the calendar month in which each loan was made and (b) calculated on the basis of the exchange rates prevailing at the close of business on 15th October 1976.

§ Mr. Robert Sheldon
Following is the information:
figures for domestic and overseas public borrowing by Government, local authorities and nationalised industries, respectively, in each of the last six years for which figures are available; and what proportion of (a) GNP and (b) public expenditure these figures represent at the latest available date.

§ Mr. Denzil Davies
The tables below show figures of the amounts borrowed net of repayments by central Government, local authorities and public corporations distinguishing between net borrowing from abroad and net borrowing from the domestic private sector (Table A) for the years 1969–70 to 1975–76. The figures are also expressed as percentages of Gross National Product (Table B) and public expenditure (Table C).
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TABLE B

As a proportion of GNP

Percentage

1969–70 1970–71 1971–72 1972–73 1973–74 1974–75 1975–76

Net borrowing from the overseas sector by:

Central government -3.1 -2.8 -4.0 2.1 0.3 1.2 0.5

Local authorities 0.1 -0.1 0.2 0.3 0.6 0.1 —

Public corporations 0.2 0.3 0.1 0.1 0.1 0.8 0.7

Net borrowing from the domestic private sector by:

Central government^* 1.1 2.8 5.2 1.3 3.6 5.2† 8.4

Local authorities 1.2 1.3 0.9 0.7 1.8 2.6 1.3

Public corporations -0.5 0.3 -0.4 -0.2 0.9 — -0.2

PSBR -1.3 1.9 2.0 4.3 6.7 9.9 10.8

^* of which, on-lent to:

Local authorities 1.4 1.6 1.7 1.7 1.5 1.4 1.2

Public corporations 2.2 2.0 2.2 2.1 0.8 1.8 2.1

TABLE C

As a proportion of public expenditure

Percentage

1969–70 1970–71 1971–72 1972–73 1973–74 1974–75 1975–76

Net borrowing from the overseas sector by:

Central government -6.7 -5.6 -8.2 4.3 -0.6 2.2 0.9

Local authorities 0.2 -0.2 0.5 0.7 1.2 0.2 —

Public corporations 0.3 0.6 0.3 0.1 0.3 1.4 1.2

Net borrowing from the domestic private sector by:

Central government^* 2.3 5.6 10.5 2.7 7.0 9.1† 14.6

Local authorities 2.4 2.7 1.8 1.4 3.4 4.7 2.3

Public corporations -1.1 0.5 -0.8 -0.4 1.7 — -0.3

PSBR -2.6 3.7 4.1 8.7 12.9 17.5 18.7

^* of which, on-lent to:

Local authorities 2.8 3.1 3.4 3.4 2.9 2.5 2.0

Public corporations 4.5 4.1 4.5 4.2 1.5 3.2 3.7

† Includes £820 million borrowed from United Kingdom banks, being the sterling equivalent of part of the $2,500 million facility arranged on the Eurodollar market (1.0 per cent, of GNP, 1.8 per cent. of public expenditure).

		Total amount outstanding $ million	Amount carrying exchange cover guarantee $ million
Nationalised Industries	…	6,856.0	6,244.2
Post Office	…	1,505.9	1,474.9
Local Authorities	…	1,343.2	1,248.7

			£ million at exchange rates prevailing at the end of the month when loans were taken out	£ million at exchange rates at close on 15th October
Local authorities	…	…	540	810
National Coal Board	…	…	310	390
Electricity Council	…	…	1,050	1,500
South of Scotland Electricity Board	…	…	140	200
North of Scotland Hydro-Electricity Board	…	…	100	140
British Gas Corporation (and Gas Council)	…	…	400	570
Post Office	…	…	690	910
British Steel Corporation	…	…	470	610
National Water Corporation	…	…	590	690
British Rail	…	…	50	50

NET BORROWING BY CENTRAL GOVERNMENT, PUBLIC CORPORATIONS AND LOCAL AUTHORITIES AND PUBLIC SECTOR BORROWING REQUIREMENT (PSBR)
TABLE A
£ million
	1969–70	1970–71	1971–72	1972–73	1973–74	1974–75	1975–76
Net borrowing from the overseas sector by:
Central government	-1,355	-1,254	-2,052	1,224	-202	983	528
Local authorities	49	-42	120	197	404	73	-15
Public corporations	66	143	63	25	87	623	682
Net borrowing from the domestic private sector by:
Central government^*	453	1,275	2,636	760	2,389	4,141 †	8,279
Local authorities	485	599	440	397	1,159	2,117	1,306
Public corporations	-223	122	-193	-105	595	-5	-169
Total=PSBR	-525	843	1,014	2,498	4,432	7,932	10,611
^* of which, on—lent to:
Local authorities	563	711	861	968	1,000	1,114	1,150
Public corporations	913	922	1,137	1,194	502	1,466	2,110

TABLE B
As a proportion of GNP
Percentage
	1969–70	1970–71	1971–72	1972–73	1973–74	1974–75	1975–76
Net borrowing from the overseas sector by:
Central government	-3.1	-2.8	-4.0	2.1	0.3	1.2	0.5
Local authorities	0.1	-0.1	0.2	0.3	0.6	0.1	—
Public corporations	0.2	0.3	0.1	0.1	0.1	0.8	0.7
Net borrowing from the domestic private sector by:
Central government^*	1.1	2.8	5.2	1.3	3.6	5.2†	8.4
Local authorities	1.2	1.3	0.9	0.7	1.8	2.6	1.3
Public corporations	-0.5	0.3	-0.4	-0.2	0.9	—	-0.2
PSBR	-1.3	1.9	2.0	4.3	6.7	9.9	10.8
^* of which, on-lent to:
Local authorities	1.4	1.6	1.7	1.7	1.5	1.4	1.2
Public corporations	2.2	2.0	2.2	2.1	0.8	1.8	2.1

TABLE C
As a proportion of public expenditure
Percentage
	1969–70	1970–71	1971–72	1972–73	1973–74	1974–75	1975–76
Net borrowing from the overseas sector by:
Central government	-6.7	-5.6	-8.2	4.3	-0.6	2.2	0.9
Local authorities	0.2	-0.2	0.5	0.7	1.2	0.2	—
Public corporations	0.3	0.6	0.3	0.1	0.3	1.4	1.2
Net borrowing from the domestic private sector by:
Central government^*	2.3	5.6	10.5	2.7	7.0	9.1†	14.6
Local authorities	2.4	2.7	1.8	1.4	3.4	4.7	2.3
Public corporations	-1.1	0.5	-0.8	-0.4	1.7	—	-0.3
PSBR	-2.6	3.7	4.1	8.7	12.9	17.5	18.7
^* of which, on-lent to:
Local authorities	2.8	3.1	3.4	3.4	2.9	2.5	2.0
Public corporations	4.5	4.1	4.5	4.2	1.5	3.2	3.7
† Includes £820 million borrowed from United Kingdom banks, being the sterling equivalent of part of the $2,500 million facility arranged on the Eurodollar market (1.0 per cent, of GNP, 1.8 per cent. of public expenditure).