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Bank Of England

Volume 979: debated on Thursday 21 February 1980

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asked the Chancellor of the Exchequer whether the surplus earned by the Bank of England on its operations payable to the Exchequer are taken into account in estimating the public sector borrowing requirement.

The profits of the issue department, after deduction of the bank's expenses, are paid to the National Loans Fund under the provisions of section 9 of the National Loans Act 1968. In accordance with the recommendations of the Select Committee on Nationalised Industries—Session 1969–70—and with the observations of the Chancellor of the Exchequer as set out in the White Paper of March 1971—Cmnd. 4633—a payment in lieu of dividend is made to the Consolidated Fund from the banking department's profits, after making an appropriate provision for reserves and working capital.These transactions therefore reduce the public sector borrowing requirement.