HC Deb 14 February 1980 vol 978 cc738-9W
Mr. Golding

asked the Secretary of State for Industry what representations have been made asking him to vary the cash limit for the Post Office; what have been the arguments put forward in support of those representations; what has been his response; and whether he will make a statement.

Mr. Michael Marshall

My right hon. Friend has received representations from the Post Office Engineering Union and the Council of Post Office Unions arguing that the assumptions on which the Post Office's current external financing limit was based were unrealistic and that such limits are inappropriate to a trading organisation like the Post Office.

In his replies my hon. Friend the Minister of State made it clear that the present public sector borrowing situation made it impossible for the Post Office to increase its borrowing in order to meet wage settlements and other costs that had proved higher than expected when the limit was set and that the difference would have to be made good in other ways.

However, as my right hon. Friend explained in reply to my hon. Friend the Member for Altrincham and Sale (Mr. Montgomery) on 31 October 1979—[Vol. 972, c. 549]—the Government are prepared to adjust the Post Office's external financing limit to take account of the delayed payments outstanding at 31 March 1980 as a result of the interruption in billing. These payments will be recovered in 1980–81 and a corresponding adjustment will be made to that year's external financing limit.