Transport (London) Act 1969

8 Borrowing by and loans to Executive

(1) The Executive may borrow temporarily, by way of overdraft or otherwise, from any person such sums as they may require for meeting their obligations and discharging their functions; but the Executive shall ensure that the aggregate of the amount outstanding in respect of any temporary loans raised by the Executive under this subsection or raised by any subsidiary of the Executive does not at any time exceed such amount as the Council may for the time being have approved.

(2) The Executive may, with the approval of the Council, borrow otherwise than by way of temporary loan from any person and in any manner such sums as the Executive may require for all or any of the following purposes, namely—

(a) for meeting any expenses properly chargeable to capital, being expenses incurred in connection with the provision or improvement of assets in connection with their business;

(b) for the provision of working capital;

(c) for acquiring an undertaking or part of an undertaking;

(d) for the making of any payment which they are required by or under this Act to make by way of compensation ;

(e) for subscribing for or acquiring securities of a body corporate otherwise than by way of investment;

(f) for the payment of interest charged to capital account under section 7(4) of this Act;

(g) to pay off any debt incurred by the Executive or any liability (including the fulfilment of any guarantee given by the Commission or the London Board) assumed by or transferred to the Executive in pursuance of this Act;

(h) for making any loan, or fulfilling any guarantee given, in pursuance of the powers conferred on the Executive by this Act;

(j) for any purpose for which capital moneys are properly applicable, whether or not specified in the foregoing paragraphs of this subsection ;

and the Executive shall exercise their control over any subsidiary of theirs so as to ensure that the subsidiary does not borrow otherwise than by way of temporary loan from any person without the approval of the Council or for any purpose other than purposes of the subsidiary such as are specified in paragraphs (a) to (e) and (j) of this subsection or for paying off any debt incurred by the subsidiary.

(3) The approval of the Council to a borrowing by the Executive under subsection (1) or (2) of this section from a person other than the Council shall operate as a guarantee by the Council of the repayment of the principal of, and the payment of interest on, the sum borrowed.

(4) In Schedule 2 to the [1963 c. 33.] London Government Act 1963, in sub-paragraph (2) of paragraph 27 (which specifies the classes of persons to whom the Council may make loans under that paragraph) after paragraph (b) there shall be inserted the following paragraph:—

“(bb) the London Transport Executive”;

and notwithstanding anything in paragraphs 25 to 29 of that Schedule the Council shall have power to lend to the Executive any amount which the Executive desire to borrow under subsection (1) of this section and for that purpose may themselves borrow temporarily, by way of overdraft or otherwise, from any person such sums as they may require so to lend to the Executive.

(5) Any loan by the Council to the Executive shall be made at a rate of interest sufficient to ensure so far as reasonably practicable that having regard to all the circumstances existing at the time when the loan to the Executive is made no loss will be incurred by the Council in respect of that loan.

(6) All moneys borrowed by the Executive shall be charged indifferently on all their revenues, and all securities created by the Executive shall rank equally without any priority; but nothing in this subsection shall affect any right to priority conferred by a security for any liability assumed by or transferred to the Executive in pursuance of this Act.

(7) The provisions of this section shall have effect subject to any order made under section 1 of the [1946 c. 58.] Borrowing (Control and Guarantees) Act 1946, and for the purposes of that Act and any such order the Executive shall be deemed to be a local authority within the meaning of that Act.

(8) The Executive shall be deemed to be a local authority for the purposes of—

(a) the enactments relating to loans by or borrowing from the Public Works Loan Commissioners; and

(b) section 203 of the [1933 c. 51.] Local Government Act 1933 and section 278 of the [1947 c. 43.] Local Government (Scotland) Act 1947 (which relieve lenders from making certain inquiries);

and the Minister may, on the application of the Executive made with the approval of the Council, by order provide for the application with or without modifications to borrowing by the Executive of any specified statutory provision relating to borrowing by a local authority.

(9) References in this section to borrowing do not include—

(a) borrowing by the Executive from a subsidiary of theirs ; or

(b) the receipt of money by the Executive in the course of the carrying on of a savings bank operated by the Executive or the use by the Executive of money so received; or

(c) the receipt or use by the Executive of money of a pension fund established for the purposes of a pension scheme in which employees of the Executive or a subsidiary of theirs participate.