HC Deb 18 July 1988 vol 137 cc511-2W
Mr. Woodcock

To ask the Secretary of State for Energy if he will take steps to privatise the coal trading interests of British Coal.

Mr. Michael Spicer

It is our ambition that all activities of British Coal should be returned in due course to the private sector. The possibility of privatising British Coal's peripheral activities is kept under regular review.

Mr. Woodcock

To ask the Secretary of State for Energy if he will make a statement on British Coal involvement in the private sector.

Mr. Michael Spicer

British Coal's major interests in private sector companies are set out at page 43 of the corporation's report and accounts for 1987–88. It is British Coal's intention to continue to pursue the disposal of peripheral activities where suitable opportunities present themselves. The Government welcome this.

Mr. Woodcock

To ask the Secretary of State for Energy if he will make a statement on the proposed financial arrangements for the purchase of British Fuels Ltd. by British Coal.

Mr. Michael Spicer

We have made it clear thatfurther acquisitions of businesses by British Coal, where my approval is required, will be agreed only if it is likely to help achieve greater efficiency. The recent increase in British Coal's stake in British Fuels Ltd. from 20 per cent. to 50 per cent. did not require my approval. It did not require any injection of cash on British Coal's part, and it left the company in the private sector. British Coal have given assurances that trading between them and British Fuels Ltd. will continue to be on an arm's-length basis.

Mr. Andy Stewart

To ask the Secretary of State for Energy what is the latest estimate of the British Coal Corporation's external financing requirement for 1988–89.

Mr. Parkinson

I announced on 26 May that I would be reviewing the corporation's external financing limit for 1988–89, in the light of the higher than expected expenditure on redundancy lump sums incurred in the closing days of 1987–88 but actually paid in 1988–89. After taking account of some offsetting savings I have now agreed that the external financing limit should be increased by £80 million from £670 million to £750 million. In reflection of this and other minor changes, the external financing now envisaged is made up as follows:

Revised Previous
£ million £ million
Restructuring grant 207 116
Other non-deficit grants 270 273
Net borrowing: Voted loans (including refinancing of existing debt) 1,800
Net other loans repaid (1,527) 273 281
750 670

This increase will be met from the reserve and does not add to the public expenditure planning total.