§ (1) In addition to the statements of accounts required by section forty-six of the principal Act, the Electricity Council shall prepare, in respect of each financial year beginning on or after the vesting date, a consolidated statement of accounts of the Council, the Generating Board and the Area Boards for that year in such form as the Minister, with the approval of the Treasury, may direct. being a form which shall conform with the best commercial standards.
§ (2) The form of a consolidated statement under this section shall be such as to provide separate information with respect to the generation of electricity, the distribution of electricity, and each of the other main activities of the electricity supply industry in England and Wales, and to show as far as may be the financial and operating results of each such activity.
§ (3) The consolidated statement prepared under this section for a financial year shall be submitted to the auditors appointed by the Minister to audit the accounts of the Electricity Council for that year, and those auditors shall make a report on the statement.
§ (4) As soon as the auditors have made a report on a consolidated statement prepared under this section, the Electricity Council shall send a copy of the statement and of that report to the Minister; and copies of the statement and report shall be made available to the public at a reasonable price.
§ (5) The Minister shall lay before each House of Parliament a copy of every statement prepared under this section and of the report of the auditors thereon. —[Mr. Maudling.]
§ Brought up, and read the First time.
§ Mr. Maudling
I beg to move, That the Clause be read a Second time.
This new Clause is designed to carry out an undertaking which I gave during Committee stage in answer to a helpful suggestion put forward from the other side of the Committee that there should be consolidated accounts as well as accounts of the individual boards. I am sure that the House as a whole will agree that it will be an improvement and that if we were merely to have the individual board accounts we should be missing something. To make the picture complete we should have a consolidated statement for the industry as a whole.
This Clause is moulded on Section 46 of the principal Act, which I think everyone will agree has been working quite satisfactorily for the last ten years. First, it says that in addition to the statements of accounts required for the individual 429 boards, the Electricity Council shall prepare an annual consolidated statement of accountsin such form as the Minister, with the approval of the Treasury, may direct, being a form which shall conform with the best commercial standards.That is the provision under which the industry has been working since 1947 and it will be generally agreed that it has worked satisfactorily.
Subsection (2) says that this consolidated statement shallprovide separate information with respect to the generation of electricity, the distribution of electricity, and each of the other main activities of the electricity supply industry ",and as far as possible shall showthe financial and operating results of each such activity.I am sure that is desirable—it follows precedent—because the more we can distinguish the various activities of the different boards and the industry as a whole the more true a picture we can get of its general efficiency and the meaning of its results.
Subsection (3) refers to the auditing of the accounts by the auditors appointed by the Minister to audit the accounts of the Council. Subsection (4) provides for the statement to be made and to be made public, and subsection (5) provides for it to be laid before each House of Parliament.
The Clause is to meet an undertaking which I gave earlier, and I hope it will commend itself to the House because it seems clearly common sense and an advantage that there should be, in proper form and the form to which we have grown accustomed, a consolidated statement of accounts for the industry as a whole which it shall be the responsibility of the Council to produce and which shall he laid before Parliament.
§ Mr. Palmer
We welcome this new and very useful Clause. As the Minister courteously acknowledged, it has been moved in response to a suggestion made by the Opposition in Committee. If I remember correctly, I moved the original Amendment.
We think it is an extremely sensible and valuable Clause. Apparently the accounts are to be presented in the best commercial form. May I make a plea which I have made previously on this 430 matter—that the accounts should not only be in the best commercial form but should also be in a form which enables even the normal intelligence of Members of Parliament to understand them?
§ 4.45 p.m.
§ Mr. Edward du Cann (Taunton)
May I make a short comment on subsection (2)? It deals with information not onlywith respect to the generation of electricitybut also with respect toeach other of the main activities of the electricity supply industry in England and Walesand the statement isto show as far as may be the financial and operating results of each such activity.In Standing Committee my right hon. Friend said:The present Minister of Supply, when he was Minister of Fuel and Power, explained that he had given instructions to the boards to maintain separate accounts for their separate activities, in order to see that the details were properly allocated between one and the other.He made that comment in reference to the activities of the Board in trading in retail appliances
I am one who believes that the market in electrical appliances is expanding, and what we want to see is the area boards, together with the private contractors, increasing their share of that market. I fully agree with the point which my right hon. Friend made, when he went on to say:Through free and fair competition we get the biggest and most efficient market in all these appliances."—[OFFICIAL REPORT, Standing Committee D, 26th February, 1957; c. 352.]On the other hand, it would be idle not to recognise that for a long time there has been considerable concern among private contractors about the activities of the area boards in this matter. Some of them have felt—I do not suggest that they were necessarily always right, but it is right that the point should be made—that they have been competing against unfair competition on the part of the area boards. If the maximum publicity is given to the affairs of the boards and if their accounts in this connection are made as clear and as full as possible, those fears will largely disappear.
I ask my right hon. Friend whether the Clause in effect makes mandatory the instructions which the present Minister of Supply originally gave to the 431 area boards, and whether he will have this point very much in mind in order to dispel the fog of unhappiness which has undoubtedly clouded the retail activities of the area boards in the past.
§ Mr. Maudling
I do not think that anyone has anything to hide in this matter. The phrase in the new Clause isother main activities of the electricity supply industry ".I am sure that what my right hon. Friend the Minister of Supply meant in his announcement was that he would ask the area boards and electricity boards generally, who will certainly agree, to treat such retail activities as they are engaging in as "other main activities" so that they may be separately shown in the accounts. The intention was as far as possible to show separately the accounts of the retailing activities, and I think that is generally right.
§ Mr. Palmer
Is it not a fact that there was agreement with the Electrical Contractors Association to that effect?
§ Mr. Nabarro
Is it not also a fact that there is no agreement whatever in respect of the retail activities of the area boards. selling appliances, between them and their counterpart private enterprise suppliers of appliances—no agreement at all? Only on contracting is there an agreement.
§ Mr. Maudling
I do not think that that arises out of the Clause. The main point here is whether the consolidated accounts will show the effect of the retail activities. I can assure my hon. Friend that that is the intention and that it is the desire of everyone.
§ Mr. Nabarro
I have not previously intervened in the debate, because this might be considered a relatively minor point at this stage, but not only should we have these accounts of the principal activities of the area boards but I hope they will show in properly analysed form what are the various forms of expenditure incurred, notably in connection with the retail sales activities. For example, we have the monstrous situation today, still obtaining, that in respect of many of these area boards' showrooms nothing whatever is paid in rates to the local authorities, either through the pool or 432 directly to the authorities, yet the area boards' showrooms are full of appliances of every description which the boards sell in competition with private enterprise shopkeepers.
That is the kind of thing which I want brought out in detail and shown in the accounts published from time to time so that we in the House may put our finger upon unfair trading practices of that kind.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill