One, Sir. Section 14 of the Finance Act, 1969, enabled local authorities to pay interest without deduction of tax on foreign currency borrowing, and we are prepared in suitable cases to provide relief for the exchange uncertainties involved but the terms and timing of such borrowings must have regard to conditions in the markets concerned and other demands on those markets.
I am aware of the circumstances affecting the hon. Member's local authority, but the answer is as I have already given it to him, namely, that those demands, and other demands, have to be regulated, and note has to be taken of the condition of the market.
Will my right hon. Friend tell the House whether the restric- tions imposed by the Treasury on local authority borrowing overseas has anything to do with the advice tendered to the Bank of England and the Treasury by merchant banks which are attempting to regulate themselves so as to prevent so many local authorities from getting into the queue for borrowing?