Clause 89 - Borrowing

Part of Pensions Bill – in a Public Bill Committee at 4:45 pm on 23rd March 2004.

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Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions 4:45 pm, 23rd March 2004

We are both such gentlemen; we were deferring to one another, although that may not continue.

The clause allows the board to borrow sums that it may require from time to time to carry out its functions and to give security for any amounts that it borrows. The power to borrow is designed to address short-term liquidity problems and is normal for many executive, non-departmental public bodies. For example, the provision exists for the Pensions Compensation Board. The board may borrow from certain deposit takers or banks, and this term is defined as organisations authorised to accept deposits, and complies with the Financial Services and Markets Act 2000. However, the power will be restricted, in that the board may not borrow if its total borrowing would exceed its borrowing limit, which will be set by the Secretary of State in regulations. The board will, of course, also have to meet legal requirements for the prudent management of its finances and investments.