Financial Resolutions, 1978: Financial Statement, Budget, 1978. - Debt service costs
The Estimates volume does not include two large commitments which come under the heading of Central Fund Services, namely debt service, and our contribution to the budget of the European Communities.
Debt service costs rose from £278 million in 1976 to £334 million in 1977. The 1977 out-turn was, in fact, £41 million less than was estimated at budget time last year. The difference, as I have already said, was due mainly to a significant reduction in interest rates on domestic borrowings and to the increase in the value of the pound in relation to those foreign currencies which make up our foreign debt. Even with the assumption, which I am making, that these favourable conditions will continue, the further borrowing in 1977 and 1978 will increase the debt service estimate in 1978 by about £70 million.