SECTION 67: Lending by the Secretary of State.
Purpose and Effect
The purpose of this section is to enable the Treasury to issue to the Secretary of State, out of the National Loans Fund, such sums as are required by him for making loans to the Scottish Ministers under section 66 (i.e. short term loans to meet shortfalls or to provide a working balance in the Scottish Consolidated Fund). The section also sets a limit on such short term borrowing of £500 million, but provides that the Secretary of State may, with the consent of Treasury, increase this amount by order. Repayments received by the Secretary of State under section 66 are to be paid into the National Loans Fund.
General
This section, together with section 66 put in place arrangements for short-term borrowing by the Scottish Executive to cover deficits or to provide a working balance in the Scottish Consolidated Fund. Section 66 deals with the circumstances under which the Scottish Executive may borrow from the Secretary of State and arrangements for repayments. This section deals with lending by the Secretary of State of such sums as are required by him for making loans under section 66.
Parliamentary Consideration
| Stage | Date | Column |
|---|---|---|
| CC | 12-Feb-98 | 643 |
| LC | 30-Jul-98 | 1707 |
Details of Provisions
Subsection (1) provides that the Treasury may issue to the Secretary of State, out of the National Loans Fund, the sums required by him for making loans under section 66. The Treasury alone can operate on the National Loans Fund. The effect of this subsection is to confer the power on Treasury to issue sums to cover the shortfall in funding or to provide a working balance in the Fund referred to at section 66. Such borrowing will be from the National Loans Fund only.
Subsection (2) provides that the aggregate outstanding of principal sums borrowed under section 66 must not exceed £500 million.
Subsection (3) provides that the Secretary of State may by order made with the consent of Treasury substitute for the amount specified in subsection (2) such increased amount as may be specified in the order. This will enable the Secretary of State to increase the amount from time to time, for example, to keep pace with inflation or to meet unforeseen circumstances. Further provision about the making of subordinate legislation is to be found in sections 112 to 115 and Schedule 7.
Subsection (4) provides for sums received under subsection 66(3) by the Secretary of State to be paid into the National Loans Fund.