National Coal Board

HC Deb 14 March 1980 vol 980 cc740-2W

Mr. Skeet

asked the Secretary of State for Energy for how many years the National Coal Board has deferred interest payments; what the amounts were identified for this purpose during each of the past five years; and to what extent the practice is to be continued.

Mr. John Moore

The board has always paid interest charges as due but in certain cases deferred its inclusions in the profit and loss account. This is explained in accounting policy note 10 of the board's 1978–79 accounts in the following termsThe Board have therefore decided that the interest on the capital cost of new mines, and of projects at existing mines involving new surface drifts or major underground drivages into new areas of coal not previously accessible, should be deferred from charge to revenue account until revenue production commences from the new mine or new area of coal reserves. The interest deferred will then be amortised on a straight line basis over a period substantially shorter than the life of the reserves concerned". The board first adopted this accounting policy in its accounts for its financial year 1976–77 and has continued it thereafter. The capital expenditure in each financial year of the board and the amounts of interest thereon deferred from charge to profit and loss account are:

	Capital Expenditure
	£m
1976–77	38
1977–78	64
1978–79	87
	Interest subject to deferred charge to revenue account
	£m
1976–77	2.3
1977–78	8.4
1978–79	14.4

The board proposes to continue this accounting policy in the current financial year and in future.

Mr. Cartwright

asked the Secretary of State for Energy what advice or guidelines he gave the electricity industry on the level of price increase that would be acceptable to the Government in (a) April 1980 and (b) autumn 1980; and what is his estimate of these price rises for domestic consumers.

Mr. Norman Lamont

On 16 January, in announcing to the House a three-year financial target for the electricity supply industry in England and Wales, I said that electricity prices were likely to increase over the period of the target by about 5 per cent. over and above increases in the industry's own costs of which fuel costs are the biggest element. Details of necessary tariff changes are a matter for the industry, but the Government have asked the industry to phase this year's increases in two stages.