HL Deb 07 November 1989 vol 512 cc607-8

27 Page 26, line 20, leave out '£2.4 million' and insert '£2 million net (or £2.4 million gross)'.

28 Page 26, line 21, leave out '£1.2 million' and insert '£1 million net (or £1.2 million gross)'.

29 Page 26, line 26, leave out '£9.6 million' and insert '£8 million net (or £9.6 million gross)'.

30 Page 26, line 27, leave out '£14.7 million' and insert '£3.9 million net (or £4.7 million gross)'.

31 Page 26, line 33, leave out from 'group' to end of line 35 and insert — 'In In relation to the aggregate figures for turnover and balance sheet total, "net" means with the set-offs and other adjustments required by Schedule 4A in the case of group accounts and "gross" means without those set-offs and other adjustments' and a company may satisfy the relevant requirement on the basis of either the net or the gross figure.'.

Lord Strathclyde

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 27 to 31. This group of amendments gives companies two alternative ways of calculating whether or not they meet the conditions for a small-size or medium-size group under new Section 249, instead of one way as at present. I beg to move.

Moved, That the House do agree with the Commons in the said amendments. —(Lord Strathclyde.)

Lord Peston

My Lords, I again have another layman's question. This seems to make sense, but I have a question. Although on and off I took part in the proceedings on this Bill, I become more and more convinced that I do not understand any of it. Can the noble Lord explain to me, net or gross of what?

Lord Trefgarne

My Lords, the original sum.

Lord Peston

My Lords, that leaves me even more mystified.

Lord Strathclyde

My Lords, if I may briefly explain: in order to qualify a group must meet two of three tests of size. These relate to the aggregate group figure for turnover and balance sheet totals and the number of group employees. The Bill in its original form would require those aggregate figures to be calculated on a gross basis—that is, without making the adjustments which would otherwise be required to prepare statutory consolidated accounts; in other words, without the usual elimination of intra-group transactions. This method has the attraction of simplicity. It should be permitted where the question is whether or not a group is exempt. The alternative of using a net basis would be wholly inappropriate in most cases. The noble Lord talks of gross or net; basically it is gross or net of intra-group transactions.

On Question, Motion agreed to.