New Clause 1

HC Deb 04 March 1981 vol 1000 cc279-80

GOVERNMENT GUARANTEES

'(1) The Ministers may guarantee, in such manner and on such conditions as they think fit, the repayment of the principal of and the payment of interest on any sums which the Authority borrows otherwise than from Ministers.

(2) Immediately after giving any such guarantee the Minister shall lay before each House of Parliament a statement showing the extent and character of the guarantee and the circumstances in which it came to be given.

(3) If any sum is paid by the Ministers in fulfilment of a guarantee under this section, the Authority shall as from the date of the payment be indebted to the Ministers in the amount of payment and the Ministers shall lay before each House of Parliament as soon as practicable after the end of the financial year in which the payment is made a statement showing the amount and the circumstances in which it was made.

(4) Where any sum is so paid, the Authority shall make to the Ministers, at such time and in such manner as the Ministers from time to time direct—

1. (a)payments of such amount as the Ministers so direct in or towards repayment of that sum; and
2. (b)payments if interest at such rate as the Ministers so direct on what is outstanding for the time being in respect of that sum;
• and so long as that sum has not been repaid in full, together with any interest payable, the Ministers shall, from time to time as the Treasury may request and in any case not less often than once in each financial year, lay before each House of Parliament a statement showing how much of that sum remains to be repaid by the Authority, the proposed programme for future repayments, and what directions are currently in force or are proposed to be given with respect to the payment of interest.

(5) The consent of the Treasury is required for any guarantee given by the Ministers under this section and for any direction given by them under subsection (4) above.'.—[Mr. Buchanan- Smith.]

Brought up, and read the First time.

3.38 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith)

I beg to move that the clause be read a Second time.

The new clause provides an enabling power the purpose of which would be to assist the Sea Fish Industry Authority to borrow funds for the exercise of its powers. Certain lending institutions, such as the European Investment Bank, will lend funds only if they obtain a Government guarantee of repayment of the loan principal and interest payments. The Government consider that it would be helpful to the new authority to enable it to borrow from such sources and we therefore propose to take the powers in the clause to provide such guarantees.

The clause provides for guarantees to be given in respect of principal and interest. There are provisions to ensure that Parliament is kept informed of the use to which the powers are put and to provide for a situation in which the Government make payments to the authority in fulfilment of the guarantee. Similar powers already exist in respect of other bodies and the provisions that I am introducing follow closely the existing precedents.

It is difficult to judge at present how such powers may be used, but I hope that the House will agree that it is prudent to take them, since they could give the authority additional scope in funding its activities. I think that I interpret correctly the wishes of the House and of the Standing Committee on the Bill when I say that we want to give the new authority as flexible a framework as possible in which to operate.

Mr. Gavin Strang (Edinburgh, East)

The Opposition are happy to support the new clause. It gives additional financial flexibility to the new authority. It is an important point of principle, in the sense that the authority will be free to borrow from the private sector and the Government will guarantee its borrowings. That is in line with the Government's thinking on at least one nationalised industry, and we are happy that the new clause should be added to the Bill.

Mr. Arthur Lewis (Newham, North-West)

What is the view of the Social Democratic Alliance on the new clause? I was hoping to hear an SDA Member giving his views. None of them is here. Apparently the SDA is the coming Government, I should like to know the views of its Members.

Question put and agreed to.

Clause read a Second time, and added to the Bill.