§ Mr. Formanasked the Secretary of State for Energy what payments of deficit grant will be made to the National Coal Board in respect of the current financial year; and if he will make a statement.
§ Mr. Peter WalkerMy hon. Friend the Financial Secretary to the Treasury will be laying before Parliament supplementary estimates which include increased 593W provision for deficit grant payments to the National Coal Board. The upper limit for such payments in respect of the current financial year will be raised from £408 million to £600 million.
Prospective losses on this scale underline the seriousness of the board's financial position and the extent of the industry's dependence on the Government and the taxpayer.
The deterioration in the board's position has occurred despite considerable progress made in reducing costs and excess output. Markets and market proceeds have declined and substantial additional provision has had to be made for subsidence damage. The revised deficit grant provision also takes account of the cost to the NCB of measures agreed by the Government to support the foundry coke market, to encourage coal stocking by the CEGB and industrial coal consumers, and to substitute, during the first six months of the year, for imports.
There are still significant areas of uncertainty which could increase yet further the board's deficit in revenue account. For example, the chairman of the board has said that continuation of the overtime ban to the end of March could cost the Board £80 million on its profit and loss account this year, even though it has brought benefits to the Board in terms of its immediate cash-position. In that event, the Government would need to consider whether to seek Parliamentary approval for a further payment of deficit grant since, as the House knows, the NCB now has no reserves.