Coal Industry Act 1973

2 Borrowing powers of the Board and its subsidiaries and powers to guarantee loans

(1) The following provisions shall be substituted for subsections (3) and (4) of section 1 of the Act of 1965 (borrowing powers of the Board) in relation to any time on or after 1st April 1973, that is to say—

“(3) Without prejudice to subsection (4) of this section, the aggregate amount outstanding in respect of the principal of—

(a) sums borrowed by the Board otherwise than from any of their wholly owned subsidiaries (including the sum which under section 1(4) of the Coal Industry Act 1973 is deemed to have been so borrowed), and

(b) sums borrowed by any wholly owned subsidiary of the Board otherwise than from the Board or from another such subsidiary,

shall not exceed £550 million or such greater sum, not exceeding £700 million, as the Secretary of State may specify by order made by statutory instrument.

(4) The aggregate of the amounts outstanding in respect of sums borrowed temporarily by the Board under subsection (1) and subsection (2A) of this section—

(a) shall not at any time exceed such limit as the Secretary of State may from time to time direct, and

(b) at the end of any financial year of the Board shall not be such as to permit any accumulated deficit on the Board's revenue account to exceed £50 million or such lesser or greater sum, but not exceeding £100 million, as the Secretary of State with the approval of the Treasury may specify by order made by statutory instrument.”

(2) In accordance with any general authority given by the Secretary of State with the approval of the Treasury, the Board may under subsection (1) or subsection (2A) of section 1 of the Act of 1965 borrow temporarily from any person other than the Secretary of State any sum which they have power to borrow under either of those subsections with the consent of the Secretary of State.

(3) With the consent of the Secretary of State and the approval of the Treasury the Board may borrow (otherwise than by way of temporary loan) from the Commission of the European Communities or from the European Investment Bank (established by Article 129 of the E.E.C. Treaty) any sum in sterling which the Board have power to borrow from the Secretary of State under section 1(2) of the Act of 1965.

(4) It is hereby declared for the avoidance of doubt that references in section 1 of the Act of 1965 to borrowing by the Board do not include borrowing by subsidiaries of the Board.

(5) The Board shall not make any loan to any of their subsidiaries except with the consent of the Secretary of State and the approval of the Treasury or in accordance with any general authority given by the Secretary of State with the approval of the Treasury.

(6) The Board shall not exercise their power to guarantee the repayment by any person of money lent to him, or the payment of interest on money lent to any person, unless the Secretary of State gives his consent or it is exercised in accordance with a general authority given by the Secretary of State.

(7) It shall be the duty of the Board to exercise their control over their wholly owned subsidiaries so as to secure that no such subsidiary guarantees the repayment by any person of money lent to him, or the payment of interest on money lent to any person, except with the consent of the Secretary of State or in accordance with a general authority given by him.

(8) The [S.I. 1972 Nos. 468, 469.] Coal Industry (Borrowing Powers) Order 1972 (which increased to £950 million the limit imposed by subsection (3) of section 1 of the Act of 1965) and the [S.I. 1972 Nos. 468, 469.] Coal Industry (Accumulated Deficit) Order 1972 (which increased to £100 million the limit on the accumulated deficit of the Board) are hereby revoked as from the end of March 1973.