HC Deb 07 June 1989 vol 154 cc138-40W
Mr. Franks

To ask the Secretary of State for Transport on what date Barrow-in-Furness borough council applied to him for approval for the council to guarantee with National Westminster bank plc the overdraft facilities of Barrow Borough Transport Ltd.; and what was his reply.

Mr. Portillo

Barrow-in-Furness borough council applied to the Secretary of State for Transport for approval to guarantee an overdraft facility on 12 August 1988 and submitted further information in support of this application on 16 September and 13 October. The application was, however, overtaken by subsequent events leading up to the appointment of administrators on 21 December.

Mr. Franks

To ask the Secretary of State for Transport (1) on what date Barrow-in-Furness borough council applied to him to make loans to Barrow Borough Transport Ltd.; and what was his reply;

(2) what information he has as to the total amount of loans made by the Barrow-in-Furness borough council to Barrow Borough Transport Ltd. and as to between what dates these loans were made; and whether he gave his prior consent to the making of such loans under section 79 of the Transport Act 1985.

Mr. Portillo

We were informed in December 1988 by the council that it had made certain payments on behalf of the company between October 1986 and March 1987 and were asked whether consent was needed. We indicated that retrospective consent was not possible. Otherwise no application for consent to loans has been received and I have no information on loans made by the council to the company. The council does not need the Secretary of State's consent to make loans in connection with the provision or improvement of assets, provided that such loans are on terms no more favourable than those on which the authority can itself borrow.

Mr. Franks

To ask the Secretary of State for Transport what information he has as to(a) how many directors were appointed at any one time to the board of directors of Barrow Borough Transport Ltd., (b) how many of these directors were also councillors on Barrow-in-Furness borough council and (c) the financial status of such appointees.

Mr. Portillo

We have no specific knowledge on these points.

Mr. Franks

To ask the Secretary of State for Transport what information he has as to(a) on what date administrators were appointed by Barrow Borough Transport Ltd. and (b) what the total amount of indebtedness by Barrow Borough Transport Ltd. to Barrow-in-Furness borough council was at the date of the appointment of the administrators; and whether he gave his consent to the appointment of these administrators.

Mr. Portillo

Administrators were appointed on 21 December. We understand from the council that £628,000 was owed to them by the company. The Secretary of State's consent was not required to the appointment of administrators, which was made by the courts following an application by the directors of the company under the Insolvency Act 1986. The Secretary of State was, however, kept informed by the council and made clear that he had no objection to the council's action in connection with the appointment of administrators.

Mr. Franks

To ask the Secretary of State for Transport what information he has as to the amounts Barrow-in-Furness borough council transferred to Barrow Borough Transport Ltd. between 6 October 1988 and 10 November 1988; and whether his prior consent was sought for such transfers.

Mr. Portillo

We have no information about any such transfers.

Mr. Franks

To ask the Secretary of State for Transport whether his consent was sought for the National Westminster Bank plc to obtain a legal mortgage over Barrow Borough Transport Ltd. property.

Mr. Portillo

No, and we have no information about any such mortgage. Public transport companies are, however, entitled to borrow from banks by way of temporary loans or overdrafts without the Secretary of State's consent, and may offer property as security for such borrowing.