§ Mr. Gordon BrownTo ask the Chancellor of the Exchequer if he will give for each year since 1979 the amount of debt written off in each of the industries privatised, showing the amount of this expenditure which was met from(a) the relevant departmental programme as given in the public expenditure White Paper and (b) the reserve.
§ Mr. Norman Lamont[holding answer 28 March 1988]: The normal practice on privatisation (of a nationalised industry or company wholly or majority owned by Government) is to repay, rather than write off debt. This repayment may be financed from the company's existing resources, the injection of new equity, or new debt finance. In some cases, the Government provide the finance to 422W repay debts (for example, by an equity injection). Such finance is shown in the relevant departmental programme of the public expenditure White Paper. Subsequent sales of the Government's interests in a company are recorded in the privatisation programme in the PEWP.
National loan fund debt has been formally written off only in the following cases :
Year Company Amount £
1980–81 National Freight Corporation (under Section 45 of the Transport Act 1980) 100,000,000 1982–83 British Transport Docks Board (under Section 6(1) of the Transport Act 1981) 81,293,616 1984–85 British Telecom (BT (Extinguishment of Loans) Order 1982) 2,789,865,772 1986–87 BAA (under section 3 of the Airports Act 1986) 43,503,340 However, these write-offs had no direct effect on public expenditure in as much as they represented a reconstruction of the balance sheets of the industries concerned. In each case, having had NLF debt written off, the successor company issued new securities to be held by the Secretary of State as assets of the Consolidated Fund pending realisation.