§ Lords amendment: No. 14, in page 9, line 1 leave out "and section 19(1)(a)"
§ Mr. Michael Marshall
I beg to move, That this House doth agree with the Lords in the said amendment.
§ Dr. John Cunningham
I believe that these are consequential drafting amendments and have no new effect other than that which we discussed when dealing with the previous group of amendments. If the hon. Gentleman will confirm that that is so, I shall not pursue the matter.
§ Mr. Michael Marshall
I can confirm that the Bill, by paragraph 6(1) and (2) of schedule 1, provides for a number of alterations to the 1975 Act to reflect the likelihood that a number of the BSC's activities may be carried on through subsidiaries in which there is a minority private sector stake. To take account of this, the Bill provides for the words "publicly owned company"—defined as a wholly owned subsidiary of the corporation—to be changed to the word "subsidiary" in certain places in the 1975 Act. It is essentially a tidying-up operation.
One of the places where this change has been made Ls in section 19 of the 1975 Act, which sets out the BSC's statutory borrowing limit. The position as it now stands under the Bill, therefore, is that the limit would embrace all the BSC's subsidiaries, including those in which its stake is less than 100 per cent. —and it would also cover overseas as well as United Kingdom companies. The effect would clearly be to act as a disincentive to a private sector company wishing to take a minority stake in a BSC subsidiary, since the subsidiary's borrowing powers would be curtailed if the borrowing limit that relates to the corporation had been reached. That could materially inhibit the corporation's prospects of recruiting minority partners for joint ventures and would be contrary to our general policy on privatisation.
The amendment therefore restores the situation to where it stood under the 1975 Act, which does not place statutory controls on the extent of borrowing by non wholly owned subsidiaries of the BSC or on the BSC's. borrowings from a publicly owned company. I should 1363 mention, however, that the action proposed would not affect existing controls on the borrowings of non-wholly owned subsidiaries through the external financial limit system, since all external borrowing by such subsidiaries counts against the EFL.
In short, this amendment to the definition of the BSC' s statutory borrowing limit also has the effect of restoring that definition to the same basis as that used in the British Telecommunications Bill. We regard it as an essential tidying-up and clarificatory amendment. I commend it to the House.
§ Question put and agreed to.
§ Lords amendments Nos. 15 to 21 agreed to