FINANCE BILL 2001
CLAUSE 105: MISCELLANEOUS AND SUPPLEMENTARY PROVISIONS - MISCELLANEOUS
SUMMARY
1. This clause amends section 2C of the Government Trading Funds Act 1973 by increasing the ceiling on the total amount which may, in aggregate, be borrowed by trading funds or issued to them by way of public dividend capital.
DETAILS OF THE CLAUSE
2. Subsection (1) introduces the amendments to section 2C of the Government Trading Funds Act 1973.
3. Subsection (2) increases - from £2 billion to £8 billion - the limit on the aggregate of borrowing by trading funds and amounts issued to them by way of public dividend capital imposed by section 2C(3) of the Government Trading Funds Act 1973.
4. Subsection (3) amends section 2C(4) of the Government Trading Funds Act 1973 which allows the upper limit to be increased by orders made by Statutory Instrument, by increasing the limit on this power from £4 billion to £10 billion.
BACKGROUND AND REASON FOR CHANGE
5. Section 2C of the Government Trading Funds Act 1973 requires a limit to be set on the amounts which an individual trading fund may borrow (other than by way of originating debt) and which may be issued to it by way of public dividend capital (other than any public dividend capital relating to the appropriation of assets and liabilities to the trading fund).
6. Section 2C(3) imposes a limit of £2 billion on the sum of the individual maximum limits. Section 2C(4) enables the Treasury to increase this limit to £4 billion by way of orders made by statutory instruments.
H M TREASURY: CLAUSE 105
Continuation:
7. Plans to establish a number of organisations, including the Export Credits Guarantee Department (ECGD), as trading funds during the next few years require an increase in the current limit of £4 billion.
8. Clause 105 of the Finance Bill 2001 proposes an increase in the current maximum limit from £2 billion to £8 billion, with provision to allow further increases to be made by statutory instrument up to £10 billion.