§ Mr. Porterasked the Secretary of State for Transport whether he intends to give further financial assistance to the Port of London Authority and the Mersey Docks and Harbour Company.
§ Mr. David HowellThe Government are not prepared to make grants for deficits available to these two port authorities after the end of 1982. I have now considered planning and review documents prepared by the PLA and MDHC and advice from Price Waterhouse and Company in the case of the PLA, and Peat, Marwick, Mitchell and Company in the case of MDHC.
In the last year, both port authorities have made further substantial progress in cutting costs, rationalising their operations and bringing their manpower numbers into line with the requirements of the traffic they now handle. Both chairmen have represented to me that the main interest burden the ports have to bear is not properly related to the revenue they can now expect to earn, and have asked the Government to relieve them of debt related to unproductive assets and past loans.
A complete write-off of debt to the Government of either body cannot be justified. But I accept that there is no realistic prospect of them generating enough revenue to service the whole of their existing debt, and I therefore propose a limited capital restructuring to reflect this.
In the case of the PLA, I propose to write off £26 million of debt to the Government, and to repay an outstanding commercial loan of £22 million. For MDHC, I propose to write off about £36 million of debt to the Government, although this figure may be reduced in the light of further advice from Peat, Marwick, Mitchell and Company.
Until the necessary legislation can be brought before Parliament, I propose to pay grant to the two authorities 177W to meet the payment of principal and interest on the debts concerned. I shall also continue to meet the cost of severances, and to make loan finance available for justified capital projects until I judge the authorities can make their own arrangements to cover those items. I shall also guarantee overdrafts for the two authorities to cover normal trading fluctuations. I shall seek to contain the assistance within the current statutory limit of £360 million but, if necessary, the legislation will provide for a small raising of this ceiling.