HC Deb 17 February 1987 vol 110 cc523-4W
Mr. Forth

asked the Secretary of State for Trade and Industry if he will make a statement on the external financing limit for British Shipbuilders for 1986–87.

Mr. Giles Shaw

In the debate on the British Shipbuilders (Borrowing Powers) Bill on 8 December I announced that British Shipbuilders external finance limit for 1986–87 would be revised formally once we were clearer about how some of the major uncertainties arising from the corporation's clients were to be resolved. In the meantime, I announced a firm limit of £155 million on the financing needs of the continuing businesses in areas the corporation could control.

The position on the major uncertainties is now such as to allow a new EFL of £244 million to be set, which means an increase of £114 million over the existing RFL of £130 million. The largest element of this increase is a cash requirement of £41 million in 1986–87 as a direct result of the receivership of International Transport Management Limited. As I told the House on 8 December, BS has advised that it expects to be able to recover some of these costs in due course.

Provision for this additional funding in the form of public dividend capital is subject to parliamentary approval of the necessary Supplementary Estimate. The increase in the EFL will be charged to the reserve net of some offsetting savings on existing programmes.

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