§ Sir William Clarkasked the Chancellor of the Exchequer if he has made any amendment to the terms of the public sector exchange cover scheme since the Financial Secretary announced the restriction in the scheme's coverage in his speech to the House on 11 March.
§ Mr. LawsonUnder arrangements first introduced in 1969 and renewed and revised in 1973, public sector bodies borrowing under the official exchange cover scheme were given a small interest rate benefit to encourage them to raise finance for the benefit of the reserves. The possibility has, however, emerged that in some circumstances, for some outstanding floating rate loans, that benefit could be entirely eroded, and there is a risk that the overseas borrowing, undertaken to assist the reserves, might over the life of the loan be more expensive to the borrower than the sterling borrowing he would otherwise have undertaken. In these circumstances, it is proposed to give the bodies concerned an option to revert to the terms they would have obtained had they originally borrowed in sterling, but in return they would forgo the interest rate benefit to which they could be entitled under the existing agreements.
Percentage change Relative export prices Import price competitiveness Relative wholesale prices IMF index of relative unit labour costs Relative profitability of exports Actual Normalised (a) 12 months ended June 1974 +43 +15 +47 +68 +68 -1 (b) 1976 Q4–1980 Q4 +45 +20 +54 +77 +74 -6