§ Mr. StrangI beg to move Amendment No. 1, in page 2, line 5, leave out subsection (4) and insert:
(4) So much of the suspended debt as has not become repayable by virtue of subsection (6) below shall, except as provided in paragraphs (a) and (b) above, continue to be included in the outstanding liabilities of the Authority, shall be shown in the statement of accounts of the Authority but may be so shown as a deduction from the aggregate amount outstanding by way of principal in respect of advances made by the Minister.'.
§ Mr. SpeakerWith this we are to take Government Amendments Nos. 2 and 3.
§ Mr. StrangI should explain that Amendments Nos. 2 and 3 are simply there in case the House should not accept Amendment No. 1. In Standing Committee, we were able to accept an Opposition amendment on the clear understanding that we should seek a more appropriate form of words which could be agreed between both sides of the House. We have done that, but, in the event, which, I presume, is unlikely, of Amendment No. 1 not being accepted, we shall wish to proceed with Nos. 2 and 3 in order to avoid the Bill's not making sense.
We want to ensure that the suspended debt is included in the accounts, but we think that it is necessary to do it in such a way that we are not left with a form of balance sheet which would give an unnecessarily pessimistic view of the Authority's financial position. The Authority's assets are worth, in terms of their revenue-yielding value, far less than their historic cost and should be revalued on the lower basis. The suspended debt is part of the historic cost, and if it were shown as a 1051 liability against the lower revalued assets, we should have to balance the account by showing a loss from revaluation on the assets side.
Although in purely financial terms this would not be a major objection, it would be paradoxical. I think that hon. Members on reflection would agree that it would be discouraging to the management of the Authority and to everyone concerned with the Authority if we were to set them up with a balance sheet showing a large continuing deficit after reconstruction. We therefore propose by Amendment No. 1 that on the liabilities side the Authority will first show its total borrowings remaining after write-off, including the suspended debt. The next entry will show the suspended debt itself, and this will be subtracted from the total borrowings. The remainder, which constitutes the active debt, would then be the amount to be taken into the total of the liabilities column.
The arithmetic of this process will be clearly shown in each year's accounts. In addition, we shall require that the first set of accounts to be published in the new form will include a reconstruction statement showing the effect of the changes arising from the Bill.
What I have said is an attempt at a simple lay explanation of a fairly technical accountancy matter. I gave the Opposition some notice in the hope that they would have the opportunity to study it. I believe that the Government have fairly achieved their undertaking in Committee and that this is a sensible way to meet the points raised then, which were fair points. It will mean that, following the financial reconstruction of the Authority's accounts, they will not be persistently presented in a way which would be discouraging and paradoxical and really would not make common sense. I hope that we have come up with a formula acceptable to the House.
§ Mr. Geoffrey Finsberg (Hampstead)The House will be grateful to the hon. Gentleman for the amendment, which puts the amendment carried in Committee in draftsmanlike language. Like him, I am no accountant, but we felt in Committee that the way in which it was possible, under the Bill as it stood, to slide through the accounts with merely a small footnote was undesirable. Hon. Members 1052 will recall that I commented then on the size of the lettering used for the Chairman's name as opposed to the size used for the Minister's name, and I think that the footnote might have been even smaller.
The Minister was kind enough to send us an example of how the balance sheet might look, and it will now become crystal clear to anyone who reads the Authority's accounts that there is a fairly heavy suspended loan still outstanding. The Minister has shown, and the House recognises, that in a technical matter it is impossible for Back Benchers or, indeed, for the Opposition Front Bench, to draft an amendment that will satisfy the advice that the parliamentary draftsmen or a Minister's staff will always give him. Perhaps one day Back Benchers on both sides of the House will be provided with a tame parliamentary draftsman so that they can compete with the Government's. We welcome the rewording offered by the Government in this case, and hope that the House will accept it.
§ Amendment agreed to.