Mr. Andy StewartTo ask the Secretary of State for Energy whether British Coal's external financing requirement for 1989–90 is expected to remain within the external financing limits of £720 million announced on 6 February.
§ Mr. WakehamBritish Coal's external finance requirements this year have risen sharply. Restructuring and redundancy costs are around £220 million higher than expected, including the payment of around £80 million in respect of redundancies that took place at the end of 1988–89. Mild weather and improved nuclear performance have reduced power station demand for coal. Interest rates are higher than anticipated. Offsetting savings have been achieved; in particular the capital expenditure allocation for 1989–90 has been trimmed from £550 million to £520 million. Taking all these factors into account, I have agreed to raise the corporation's external finance limit by £423 million from £720 million to £1,143 million. This increase will be charged to the Reserve and will not therefore add to the planned total of public expenditure. British Coal's temporary borrowing limit has been increased from £2,500 million to £2,910 million.
To finance these additional requirements a Supplementary Estimate for additional voted loans of £250 million was presented and approved in July, and a further Supplementary Estimate for voted loans of £200 million will shortly be laid before the House.