§ Miss McIntoshTo ask the Chancellor of the Exchequer for what reasons(a) the £162 million payment due on 1 October 2001 to Renewco was classified as public sector money and (b) the £1.2 billion loan to Railtrack administration was not classified as public sector money. [28826]
§ Mr. Andrew SmithThe Office for National Statistics (ONS) determined that Renewco's activities would be classified to the public sector. The decision was based on the application of internationally agreed definitions for national accounts. This means borrowing by Renewco would be public sector borrowing and add to public sector net debt. The borrowed funds are therefore "public sector money". Payments by Government to Renewco would be transfers of public sector money within the public sector and so would have no impact on the consolidation public sector statistics.
Loans to Railtrack's administrator count as lending by the public sector to the private sector. That lending has to be funded from public sector sources such as taxes or 656W government borrowing, and so is "public sector money". The lending is expected to be repaid before the end of March 2002 and so would have no impact on the fiscal balances and expenditure measures for the financial year as a whole.