HC Deb 22 February 1951 vol 484 cc1433-4
12. Mr. Osborne

asked the President of the Board of Trade with reference to paragraph 29 of the Comptroller and Auditor General's Report on Trading Accounts and Balance Sheets, what stocks of raw materials are expected to show a loss of £1,089,918 where the selling price value is less than cost; and what other stocks are expected to show a loss of £1,267,778 in repect of deterioration.

Mr. H. Wilson

Stocks held at the close of an accouuting year are valued for Trading Account purposes at cost or at market value, whichever is the lower. At the close of the 1949–50 accounting year, the selling prices then current of certain stocks of various materials, mainly timber, wallboard, fertiliser materials, hides and skins, flax and silk, were less than cost, and accounting provision was made accordingly. In certain cases, mainly hardwood and plywood, paper making materials, fertiliser materials, flax and rubber, provision was also made, as is customary, for possible physical deterioration of stocks. It does not follow, of course, that these losses will be incurred, and, to the extent to which the provisions are not required, they will be credited in future Accounts.

Mr. Osborne

As the world prices of all these commodities have risen in 12 months, surely the fall in the set-off against possible loss must be due to real deterioration in the stocks. Is the right hon. Gentleman satisfied that there is no negligence in looking after them?

Mr. Wilson

The hon. Gentleman will be aware, of course, that these figures relate to 31st March, 1950, and that a number of prices had fallen before 31st March, 1950. Since then, of course, as he knows, prices have taken an upward turn, and it is very probable that this paper loss may not be incurred.