Committee Reports::Report - Appropriation Accounts 1973 - 1974::24 June, 1976::Appendix


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APPENDIX 5.

EXCHEQUER BORROWING OPERATIONS, 1973-74

18 December, 1975.

An Cléireach,

An Coiste um Chuntais Phoiblí

During my examination by the Committee on 27 November I undertook to furnish a note on Exchequer borrowing operations in 1973-74 as reflected in paragraph 5 of the Report of the Comptroller and Auditor General for that year. A note for the information of the Committee is attached accordingly.

C. H. MURRAY,

Accounting Officer,

Department of Finance.

EXCHEQUER BORROWING OPERATIONS, 1973-74

1. Paragraph 5 of the Report of the Comptroller and Auditor-General shows the gross receipts and payments of the Exchequer for the year ended 31 March, 1974. The sections headed “Moneys Raised by Creation of Debt” and “Issues for the Redemption of Public Debt” must be taken together in order to gauge the net position of Exchequer borrowing operations during 1973-74.

2. Ways and Means Advances

These advances, which represent short-term Exchequer borrowing from Departmental funds under the control of the Minister for Finance, are drawn on and redeemed throughout the financial year as the requirements of the Exchequer and the funds demand. The net amount raised under this heading during 1973-74 was some £194.6 m. The cash available on the funds for investment with the Exchequer as Ways and Means Advances arises from some or all of the following sources:—

(a) cash raised through sales of securities held by the funds;

(b) receipts of fresh capital e.g. in the case of the Savings Bank Fund, net increases in the funds of the Post Office Savings Bank and Trustee Savings Banks;

(d) amounts set aside for debt redemption purposes but not immediately required (e.g. National Loan Sinking Fund moneys);

(e) utilisation of balances.

3. Telephone Capital Acts 1924 to 1973

Telephone capital requirements are borrowed in the first instance by the Exchequer, under the Telephone Capital Acts, from the Savings Bank Fund and the European Investment Bank (EIB). The “mix” in 1973-74 was approximately £16.5 m. and £7.5 m. respectively. These moneys are then advanced from the Exchequer to the Department of Posts and Telegraphs. Repayments, which are made by way of annuities charged on the Vote for the Department of Posts and Telegraphs, are made by the Department

(a) directly to the Savings Bank Fund in the case of borrowings from it, and

(b) in relation to EIB borrowing, to the Exchequer, from which are issued to the EIB the service charges.

4. Small Savings Schemes

Savings Certificates, Prize Bonds, Tax Reserve Certificates, Investment Bonds and National Instalment-Saving are the various small savings schemes, the receipts and payments for which are paid directly into and out of the Exchequer. In 1973-74 there was a net repayment under these schemes of some £180,000.

5. Exchequer Bills

At present (and in the recent past) new Exchequer Bills are issued each month to the extent only of replacing maturing bills during that month. Consequently no new money came to the Exchequer from this source during 1973-74.

6. Foreign Loans

Foreign borrowings effected by the State during 1973-74 were as follows:—

			Maturity/Capital	Interest	Receipts
Loan		Currency	Repayments	rate	£m
(a)	Ireland 6½% Notes 1973-81	150 million Swiss Francs	In full in 1981	6½%	19.905
(b)	9% Algemene Bank Loan	100 million Dutch Flo	Four equal instalments of DFL 25 m, in each of the years 1981-1984	9%	15.516
(c)	European Investment Bank Loan for Telecommunications (included in Paragraph 5 of the Comptroller and Auditor General’s Report under “Money raised under Telephone Capital Acts”)	3 m pounds sterling 8.6 m U.S. Dollars 72.0 m Luxembourg Francs	Annuity-style instalments up to 1993	8½%	7.515
(d)	World Bank Education Loan (included in Paragraph 5 under “Other Borrowings”)	U.S. Dollars	In instalments up 1991	7¼%	1.449
					44.385

7. 11% National Loan 1993-98

Some £21.2 m. was subscribed in cash to this loan which was issued in 1973-74 and is due to mature in the period 1993-98.

8. Other Borrowings

The headings “Other Borrowings” represent the proceeds of various minor borrowings by the State (including £1.449 m from the World Bank) and repayments of these type of borrowing. Excluding World Bank receipts—shown above in foreign borrowing—the net position under this heading in 1973-74 was redemptions of about £2.943 m.

9. National Loans Redemptions

(i) The amount shown in respect of the 7½% Exchequer Stock 1973 represents the extent to which sinking fund moneys were inadequate to meet cash redemptions on this stock on maturity, the shortfall being made good directly from the Exchequer.

(ii) The 8½% Conversion Stock 1973 was redeemed in full on maturity as no conversion offer was given. Because it was a short dated stock no sinking fund had been set up and consequently the full cost of redemption—£41.884 m.—fell to be met directly from the Exchequer. Holders of the stock who wished to reinvest in Government securities bought other government securities on the open market.

10. Net position: Exchequer borrowing during 1973-74

									£m
(i)	Borrowings:—
	Net Ways and Means Advances			..	..	..	..	..	194.6
	Telephone Capital Acts (excluding EIB Loan included in foreign
	borrowing below)	..	..	..	..	..	..	..	16.5
	Foreign borrowings (including EIB and World Bank Loans)							..	44.4
	National Loan issued in 1973-74			..	..	..	..	..	21.2
	Borrowing						..	..	276.7
(ii)	Redemptions:—
	7½% Exchequer Stock 1973		..	..	..	..	..	..	1.8
	8½% Conversion Stock 1973		..	..	..	..	..	..	41.9
	Small Saving schemes	..	..	..	..	..	..	..	0.2
	Other Redemptions (excluding World Bank receipts)						..	..	2.9
	Redemptions						..	..	46.8
(iii)	Net Borrowing (i)—(ii)	..	..	..	..	..	..	..	229.9