§ Mr. Marlowasked the Secretary of State for Industry whether he has required Britsh Telecom to cancel any orders.
§ Mr. Michael Marshall[pursuant to his reply, 18 June 1981]: No.
§ Mr. Marlowasked the Secretary of State for Industry what are the cash limits for British Telecom; and how they are operated.
§ Mr. Michael Marshall[pursuant to his reply, 18 June 1981]: The external financing limit for British Telecom this financial year is £380 million. The external financing limit for 1982–83 will be agreed during the 1981 Public Expenditure Survey and announced to the House in due course.
The limit controls the net amount which British Telecom may borrow from all sources during the financial year to which it relates. Certain leasing transactions are also counted within the limit. British Telecom's progress towards meeting the limit is moniored in reports submitted on a monthly and quarterly basis to the Department of Industry and the Treasury.
§ Mr. Marlowasked the Secretary of State for Industry to what extent British Telecom can borrow funds in the private sector market place, inside and outside cash limits; and to what extent this is currently being done and will be done in the future.
§ Mr. Michael Marshall[pursuant to his reply, 18 June 1981]: Under section 35 of the Post Office Act 1969, the Post Office, of which British Telecom is at present a part, can borrow temporarily in sterling from the markets, subject to Government consent. The amount which the Post Office borrows under this power fluctuates on a day-to-day basis according to commercial considerations, subject to an overall limit of £500 million agreed with the Government.
The Post Office is also empowered to borrow long-term in a currency other than sterling from any source, and to borrow long-term in sterling from the Commission of the 471W European Communities and the European Investment Bank. Loans taken out by British Telecom under these powers are estimated at about £470 million sterling equivalent at 31 March 1981. Future long-term borrowing of this type is a matter for the commercial decision of British Telecom, subject to the requirement to obtain Government consent for the borrowing concerned.
All British Telecom's borrowing counts against its external financing limit, whether it is from the Secretary of State or other sources.
The British Telecommunications Bill confers on British Teiecom, when established as a separate nationalised industry, the borrowing powers it enjoys at present as part of the Post Office. In addition it confers the power to borrow long-term in sterling from any source, subject to Government consent. Whether the Government can agree to such borrowing depends on a review of the possibilities which is currently in progress.