§ Mr. Lennox-Boydasked the Secretary of State for Transport if he will announce his decision on the request by the Port of London Authority for him to guarantee its bank overdraft.
§ Mr. FowlerIn my statement to the House of 7 December 1979—[Vol. 975, c. 385–86]—I said I was prepared to stand behind the Port of London Authority's existing overdraft facility up to a total of £5 million for a period, but only if the authority satisfied me that this was necessary. On 2 November 1980 the authority formally applied for a guarantee and I informed it on 22 December that, in accordance with my statement I was prepared to use my powers to guarantee this overdraft under section 1(1) of the Port of London (Financial Assistance) Act 1980. This would initially be for a maximum of £2.7 million
During 1980 the PLA made substantial progress in achieving its plans for returning to viability, and achieved a greater level of severances than it had originally planned. The benefits of these actions were, however, more than offset by the effect of the economic recession on the port's traffic. As a result, the authority considers that it will not now be able to return to viability within the £70 million limit on the total of Government assistance by way of loans grants or guarantees which I announced on 7 December 1979.
Before I can decide how best to react to this new situation, it will be necessary to review the measures required to restore the port to economic viability. I have arranged to engage Price Waterhouse and Co to assist me and the authority in this task.