Departmental Public Expenditure

Mr. Philip Hammond
To ask the Chancellor of the Exchequer whether his Department has incurred expenditure on (a) foreign exchange derivatives and (b) consulting on currency hedging strategies in each of the last five years.

Sarah McCarthy-Fry
[holding answer 30 March 2010]: Under the Credit Guarantee Scheme, HM Treasury uses foreign exchange derivatives to hedge fee income received for debt issued in foreign currencies. HM Treasury does not incur explicit expenditure on these transactions; any fees charged for the use of these derivatives would be reflected in the level of the foreign exchange gain received. HM Treasury reports on the Credit Guarantee Scheme, and its financial impacts, annually in its Resource Accounts.

HM Treasury has not incurred any expenditure on consulting on currency hedging strategies.