The Coal Industry (Restructuring Grants) Order 1991

Made: 20th May 1991

Coming into force: 23rd May 1991

The Secretary of State, in exercise of the powers conferred upon himby section 3(2)(a), (3), (4)(a) and (6) of the Coal Industry Act 1987[^f00001] and with the approval of the Treasury, hereby makes thefollowing Order, a draft of which has been laid before the House ofCommons and has been approved by that House in accordance with section3(10) of that Act:

1

This Order may be cited as the Coal Industry (Restructuring Grants)Order 1991 and shall come into force on the third day after the day onwhich it is made.

2

In this Order, unless the context otherwise requires—

• “the 1991/92 financial year” means the financial year of the Corporation ending in March 1992;

• “the Act” means the Coal Industry Act 1987;

• “the Corporation” means the British Coal Corporation;

• “chargeable costs” means costs which fall to be charged to a consolidated profit andloss account of the Corporation and their subsidiaries prepared inaccordance with a direction given under section 8(1) of the CoalIndustry Act 1971[^f00002] for the 1991/92 financial year;

• “employees” means employees of a relevant company;

• “payments” means periodical or lump sum payments;

• “relevant company” means the Corporation, their wholly-owned subsidiary National FuelDistributors Limited or their wholly-owned subsidiary British CoalEnterprise Limited and the expression“relevant companies” shall be construed accordingly;

and references to payments, contributions or expenditure arereferences to payments, contributions or expenditure by a relevantcompany.

3

The 1991/92 financial year shall be a specified financial year forthe purposes of section 3(4)(a) of the Act.

4

The kinds of expenditure specified in the Schedule to this Ordershall be specified kinds of expenditure for the purposes of section3(2)(a) of the Act in relation to the 1991/92 financial year.

5

• (1) The maximum amount which may be paid under section 3 of the Actby way of grant in respect of the 1991/92 financial year in relation tothe kinds of expenditure specified under a Head in the Schedule is thatsum which represents 90 per cent. of—

• (a) the relevant amount of costs specified in paragraph (2) below; or

• (b) if a larger amount has been agreed in respect of those costs forthe purposes of section 3(2)(b) of the Act, that larger amount.

• (2) For the purposes of paragraph (1)(a) above the relevant amount ofcosts is—

• (a) in the case of Heads 1, 2 and 5, the total amount of chargeablecosts of the relevant companies which are related to the kinds ofexpenditure specified under the Head in question; and

• (b) in the case of Head 6, the total amount of chargeable costs of theCorporation’s wholly-owned subsidiary British Coal Enterprise Limitedwhich are related to the kinds of expenditure specified under that Headless the total amount of any chargeable costs of that subsidiary whichare related to the kinds of expenditure specified under Heads 1, 2 and5.

6

The limit specified in section 3(6) of the Act (limit on theaggregate of grants under section 3(1)) is increased from£1,250 million to £1,500 million.

SCHEDULE — KINDS OF EXPENDITURE

Head 1: Redundancy and early retirement

• (i) Payments in respect ofredundant employees made under section 81 of the Employment Protection(Consolidation) Act 1978[^f00003]

• (ii) Payments in lieu of notice of dismissal made to personsleaving the employment of a relevant company by virtue of redundancy.

• (iii) Payments made for the purpose of assisting persons who leavethe employment of a relevant company by virtue of redundancy or earlyretirement, being payments made under arrangements established by arelevant company.

• (iv) Payments in respect of the loss of superannuation prospects bypersons leaving the employment of a relevant company by virtue ofredundancy or early retirement.

• (v) Contributions to superannuation funds maintained by virtue ofsection 37 of the Coal Industry Nationalisation Act 1946[^f00004] in respect of any increase in the cost of retirementbenefits paid before normal retirement age to persons who leave theemployment of a relevant company by virtue of redundancy or earlyretirement.

Head 2: Changes of work and place of employment

Head 5: Retraining

Head 6: New Employment

Signed

David Heathcoat-Amory — Parliamentary Under Secretary of State, — Department of Energy — 14th May 1991

We approve,

Sydney Chapman — Gregory Knight — Two of the Lords Commissioners of Her Majesty’s Treasury — 20th May 1991

Explanatory note

(This note is not part of the Order)

This Order concerns the making of grants by the Secretary of Stateto the British Coal Corporation under section 3 of the Coal Industry Act1987 (grants for workforce redeployment and reduction, etc.).

Article 3 specifies the financial year of the Corporation ending inMarch 1992 as a year in respect of which such grants may be made.

Article 4 provides for the kinds of expenditure incurred by theCorporation and their wholly-owned subsidiaries National FuelDistributors Limited and British Coal Enterprise Limited which arespecified in the Schedule to the Order to rank as eligible expenditurefor the financial year.

Article 5 sets a limit on the amount which may be advanced inrelation to the financial year with respect to each head of expenditurespecified in the Schedule. The limit is 90 per cent. of the relevantcosts appearing in the consolidated profit and loss account or 90 percent. of such larger amount as may be agreed by the Secretary of Stateand the Corporation with the approval of the Treasury.

Article 6 increases the limit on the aggregate amount of grantswhich may be made from £1,250 million to £1,500million.

Footnotes

[^f00001]: 1987 c. 3; section 3(4)(a) and (6) was amended by theCoal Industry Act 1990 (c. 3), section 2(2) and (3).

[^f00002]: 1971 c. 16.

[^f00003]: 1978 c. 44; section 81(4) was amended by the EmploymentAct 1982 (c. 46), section 20 and Schedule 2, paragraph 6(2).

[^f00004]: 1946 c. 59.