§ Mr. Watkinsonasked the Chancellor of the Exchequer what is his present
644W
§ Mr. Robert SheldonThe figures are as follows:
policy towards nationalised industries and the raising of funds abroad.
§ Mr. Robert SheldonI refer my hon. Friend to the answer my right hon. Friend gave to the question from my hon. Friend the Member for Ealing, North (Mr. Molloy) on 24th January (c.405). With the $1.5 billion Her Majesty's Government loan secured there is unlikely to be need for any sizeable recourse to the Euro-market by nationalised industry borrowers in the early future.
§ Mr. Watkinsonasked the Chancellor of the Exchequer what is the amount raised by nationalised industries abroad in 1976, 1975 and 1974.
§ Mr. Robert SheldonThe equivalent, at current exchange rates, of about $2.7 billion, $0.9 billion and $1.8 billion respectively.
§ Mr. Watkinsonasked the Chancellor of the Exchequer (1) what protection the Government give to nationalised industries in the matter of repayments of loans raised abroad;
(2) how many loans raised abroad have been repaid by nationalised industries; and what assistance was given by the Government in 1976, 1975 and 1974 to these nationalised industries in the repayments.
§ Mr. Robert SheldonWhere a loan has been taken out under the exchange cover scheme, the exchange risk is borne by the Exchange Equalisation Account, and the borrower's repayment obligations are limited to the sterling value of the loan 645W at the time it was drawn down. In return, the EEA retains the major part of the interest differential between the rate on the foreign currency loan and the NLF rate appropriate to the nationalised industry. For uncovered loans, the borrower bears the exchange risk himself, and no Government protection is given.
Five loans raised abroad by nationalised industries have been repaid in full since 1974. Four of these, all by the Gas Council, were taken out under the exchange cover scheme; the fifth, by British European Airways, was uncovered. There have been, in addition, part-repayments on a number of other loans.
The four Gas Council loans were all repaid in 1976, and the difference between their sterling values at the date of repayment and at the date of take-up was £35.8 million. This was met from the EEA, which had benefited from the interest differential while the loans were outstanding.