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THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT)
CONFIDENTIAL
C.P.(51) 112
17TH APRIL, 1951
CABINET
COPY NO.
31
BORROWING POWERS OF THE NATIONAL COAL BOARD
Memorandum by the Minister of Fuel and Power
Under Section 26 of the Coal Industry Nationalisation Act, 1946, the Minister of Fuel and Power is empowered to make advances to the National Coal Board for capital purposes up to an aggregate of £150 millions within a period of five years from the passing of the Act (i. e. up to 12th July, 1951) and in subsequent periods to advance such amount as Parliament may determine. It is necessary to introduce legislation urgently to extend these powers beyond July, 1951, and I propose that the monetary limit should be raised to £300 millions and the time limit removed.
2.
A limit of £300 millions would enable the Board to finance their long term plans for reorganising and developing the industry as published last year in their "National Plan for Coal". Under this Plan capital expenditure over the next fifteen years is estimated to amount to £635 millions, of which a substantial proportion will be found from the internal resources of the industry.
3.
This proposal was accepted by the Socialisation of Industries Committee (S.I.(M)(51) 4th Meeting, Minute 3), but the Legislation Committee on 16th April (H.P.C.(51) 13th Meeting, Minute 3) thought it might be politically unwise to ask Parliament to increase the Board's borrowing powers at the present juncture and requested me to consider the possibility of retaining the present limit of £150 millions but without time limit.
4.
Against the existing limit of £150 millions the Board has received £41 millions only; circumstances combined during the past five years to keep the Board's calls on the Exchequer to a minimum. But for the future, demands are expected to expand, and it is estimated that at 1949 price levels the outstanding balance of £109 millions would not last more than five years.
Although the existing powers would, with removal of the time limit, suffice for the time being, I am of the opinion that it is logical to relate new borrowing powers to the programme in the Board's National Plan. Moreover to disregard this Plan at a moment when it is under dis- cussion between the Board and the mineworkers, preparatory to formal, submission to me, may well give the impression that the Government have pre-judged the issue and are not determined to press forward with the full reorganisation and development of the coal industry.
The effects upon the mineworkers themselves are likely to be very serious. On the other hand I appreciate that a substantial extension of investment limits at the present juncture may be controversial, and indeed I should record that, alth Page the 4Tfeasury had no objection to my proposePage03müfliphs
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