Nationalised Industries and Local Authorities (Foreign Borrowing)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 25th November 1969.

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Photo of Mr Julian Ridsdale Mr Julian Ridsdale , Harwich 12:00 am, 25th November 1969

asked the Chancellor of the Exchequer what is the total of foreign borrowing by the nationalised industries to 1st November or the latest convenient date, and that of local government authorities, which he has authorised; and how much of this is in deutsche marks.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

To 1st November nationalised industries have borrowed about £88 million abroad and one local authority about £5 million. Some £64 million is in Deutsche marks.

Photo of Mr Julian Ridsdale Mr Julian Ridsdale , Harwich

When has this debt, which totals £100 million, to be repaid? How much has the total interest to be paid been altered by the revaluation of the Deutsche mark?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

The total additional cost has already been given in an answer, but I can repeat that the additional cost to the public sector is broadly equal to the additional benefit accruing from the reduction in the rate of interest.

Photo of Mr Robin Turton Mr Robin Turton , Thirsk and Malton

Will the right hon. Gentleman take into consideration the burden which this will place on our overseas invisible account in the future? Will he and the Chancellor of the Exchequer look into the whole question of public corporation and local authority borrowing which at the moment amounts to £2,000 million a year?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

I have already explained that the two items are broadly in balance. The net result, therefore, is that we have replaced short-term borrowing with long-term borrowing of the same amount, and that surely is advantageous.

Photo of Mr Michael Alison Mr Michael Alison , Barkston Ash

Does the Chief Secretary appreciate that this form of borrowing has the result of increasing the domestic money supply? Is this held to be an advantage or a disadvantage of the scheme?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

It is one of the elements of the scheme which has been fully taken into account. Overall the scheme was thought to be, and has proved to be, advantageous.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

Will my right hon. Friend bear in mind that it is nothing like the burden which has arisen from the net capital outflow which has restricted our economic growth over the years?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

I will gladly bear in mind anything my hon. Friend puts to me