Magazine article Public Finance

Rail Link Finance Is Public Sector Debt, Says ONS

Magazine article Public Finance

Rail Link Finance Is Public Sector Debt, Says ONS

Article excerpt

Cash raised by a private consortium to finance the extended Channel Tunnel rail link must be classed as government borrowing, the Office for National Statistics has insisted.

But national statisticians have told Public Finance that the switch will not, contrary to reports this week, affect Chancellor Gordon Brown's golden rule' on borrowing.

The ONS stated on August 2 that £1.3bn raised by London and Continental Railways through a bond issue in November 2003 must be placed on to the national accounts, because the bonds were secured against future income flows from the government to LCR.

'However, the cash will appear on the national accounts only as public sector net debt, and not public net borrowing, because the £1.3bn is guaranteed to be covered over time. In essence, the debt is already earmarked to be cancelled out,' an ONS spokesman told PF. …

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