>Gilt Edged Securities

HC Deb 14 June 1988 vol 135 cc143-4W

Mr. Redwood

To ask the Chancellor of the Exchequer what was the total net issue of gilt edged securities in the financial year 1987–88.

Mr. Lilley

The total issue of gilt edged securities, net of redemptions, in the financial year 1987–88 was £7,120 million.

Mr. Redwood

To ask the Chancellor of the Exchequer why, in the light of the fact that the public sector generated a financial surplus, it was necessary to make a net issue of gilt edged securities in 1987–88.

Mr. Lilley

The aim of the Government's funding policy in 1987–88 was to fund the PSBR and any net change in official reserves of foreign currency full over the financial year as a whole, by sales of gilt edged securities to the non-bank private sector and the overseas sector.

In the financial year 1987–88 the Government generated a public sector debt repayment of £3.5 billion. However, there was a net increase in official reserves of foreign currency of approximately £11.1 billion. After allowing for other forms of funding, £7.1 billion net gilt sales were required to achieve a full fund.