Port of London Authority (Hansard, 7 December 1979)

§ Mr. Fowler

As I told the House on 27 July, I can now announce my decision on the Port of London Authority's five-year strategic plan 1979–83. In considering the plan I have had the benefit of advice from Price Waterhouse and Co.

The plan itself presents options. The choice between them is a matter for the authority. The Government can only agree to maintain the minimum level of financial assistance to the Authority that it will need to continue with the most rapid possible rundown of manpower, and to plan for the quickest possible return to viability at least cost to the taxpayer. I therefore propose to set a strict financial limit on the total of Government assistance. Subject to adjustments to come with inflation and the latest forecasts, this is set at the level promised by the previous Government.

The details are as follows:

i. I reaffirm the undertaking given by the last Government to make grants towards the cost of severance of surplus manpower. (In the case of registered dock workers these grants are only payable up to the end of February 1980.) On current estimates, the total will slightly exceed the £35 million promised by the previous Government in 1978.
ii. I will continue to stand behind the £10 million commercial loan facility, of which the PLA has already used £2 million. I will also, of course, honour the previous 386 Government's undertaking to stand behind the earlier £15 million loan which was used in 1977 and 1978.

In addition, in the light of revised forecasts, I am prepared to stand behind the PLA in negotiating an agreement to postpone the £3 million loan repayment due in 1980 and the similar repayment due in 1981. I will also, but only if the Authority satisfies me that it is necessary, stand behind its existing overdraft facility up to a total of £5 million for a period.

I have told the PLA that within this tight limit it is for it, and not the Government, to decide on the detailed steps necessary to achieve viability. But I shall require it to report to me at intervals that it is satisfied with the progress it is making. It will know that it will have my full support in taking all necessary steps to achieve this end.

The PLA's strategic plan calls for a capital reconstruction under which there would be a substantial write-down of the authority's outstanding debt to the Government, but the Government can see no justification in present circumstances for such a write-down, since it would be incompatible with our view that assistance from public funds must be kept to the minimum needed to recover profitability.

I shall shortly be introducing a Bill to provide the necessary statutory authority for this assistance. I will, of course, continue to provide Harbours Act loans for capital works subject to the usual criteria.