HL Deb 12 June 1990 vol 520 cc227-40

7.47 p.m.

The Earl of Caithness: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(The Earl of Caithness.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD HAYTER in the Chair.]

Clause 1 [New provisions in connection with government trading funds]:

The Earl of Caithness moved Amendment No. 1:

Page 2, line 23, at end insert: ("(5A) An order establishing a trading fund for operations carried on by a person appointed in pursuance of any enactment may provide—

  1. (a) for the fund to be under the control and management of that person instead of the responsible Minister and, accordingly,
  2. (b) for this Act to have effect as if—
    1. (i) the reference to the responsible Minister in section 3(1) of this Act and the first reference to him in section 4(1), and
    2. (ii) such other references in this Act to the responsible Minister as may be specified in the order, where they are references to him in the exercise of his function of controlling or managing the fund,
were references to that person.").,

The noble Earl said: This technical amendment is designed to enable a trading fund to be established where the operations of the proposed fund are carried on by a statutory office holder. Under the Bill as currently drafted and the 1973 Act, which it amends, it is implicit that the responsible Minister will be carrying on the funded operations and accordingly all the powers and responsibilities in relation to the management of the fund are his. However, there is a difficulty if operations carried on by statutory office holders are to be funded.

Of the agencies and agency candidates listed in Annex A to Cmnd. 914 there are two cases, the Land Registry and the Department of the Registers for Scotland, where the carrying on of the activity authorised by statute is placed squarely on the shoulders of the office holder who heads the department. Financial management of the activities is for him and he oversees income and expenditure in connection with the discharge of his statutory functions. A trading fund for such activities would not be under the control and management of the responsible Minister.

The amendment deals with that difficulty by providing that, where operations which are to be funded are carried out by a statutory office holder—a person appointed in pursuance of any enactment—an order establishing the fund may provide for it to be under the control and management of the office holder and the Act is to have effect as if relevant references to the responsibility are to him. I beg to move.

Lord Bruce of Donington

We are grateful to the noble Earl for having explained this technical amendment. On behalf of the Opposition, I should like to extend our thanks to him for the co-operation which we have received since Second Reading from him and his department in elucidating the more abstruse parts of the Bill, which, as he well knows, is in part very technical.

There is one further technical query that I should like to clear up. Under the provisions of the interpretation of legislation Act of 1978, the term "person" includes a corporate body. I should like to be certain that there is no possibility of any corporate body being appointed by statute to run a particular aspect of the agency involved. It is necessary to do that because otherwise one is not clear about the matter.

The amendment refers in other parts of the Bill to the responsible Minister and the transfer or reallocation of his functions. I should like to be reassured that the other functions of the Minister in relation to the agency are not disturbed by that in any way and that we are talking about day-to-day management. I should also like to be reassured that the ultimate responsibility, in terms of responsibility to Parliament and scrutiny and examination by the National Audit Office, remains intact in all cases and that therefore, aside from the operation of the fund in the way described in the amendment, the final responsibility for accountability to Parliament will remain with the Minister of the Crown.

The Earl of Caithness

On the noble Lord's second point, I am sure that I can give him the assurance that he seeks. As he so rightly said, it is a question of the day-to-day running. I took that point even further by saying that there were two cases in which that was laid down by statute to be the responsibility of the official rather than the Minister. However, with regard to the overall responsibility, I understand that that remains with the Minister.

On the first point raised by the noble Lord, I do not believe that there is a need to cover corporate bodies because the Bill refers to a person appointed pursuant to any enactment.

Lord Bruce of Donington

That was precisely the point that I made; namely, that under the interpretation of legislation Act, "person" was held to include in all future legislation a corporate body as well as an individual. That was the only reason that I raised the point. In view of the recent development concerning the Intervention Board for Agriculture, which as I shall explain later appears to have attained agency status more recently than the noble Earl's correspondence suggests, will the noble Earl assure me that the board and its head are in no way involved in the operation of the clause?

The Earl of Caithness

As the noble Lord intends to raise the matter a little later, perhaps I may deal with the point then.

On Question, amendment agreed to.

Lord Bruce of Donington moved Amendment No. 2: Page 5, line 41, leave out ("£2,000") and insert ("£500").

The noble Lord said: In moving this amendment I should like to speak also to Amendment No. 3.

This amendment seeks to amend the Bill by substituting for the figure in the Bill the figure of £500 million and by deleting any further reference to it. As the noble Earl will be aware, under the original Trading Funds Act 1973, the aggregates of the limits in force in respect of all trading funds shall not exceed £250 million at any one time. The Bill puts the limit up to £2 billion and there is further provision by stages to a maximum of £4 billion.

I wonder why that increase is necessary. The total expenditure of all the agencies, according to the papers published on the financing of those agencies, amounts to some £9 billion. That is the total expenditure of all the agencies, not simply those that are included in this trading sphere. Why should it be necessary suddenly to move up to £2 billion and after that, if necessary, by stages to £4 billion? Can the noble Earl give me an assurance that no part of that sum is part of any future transaction to advance money for the purpose of securing a leverage buy-out by staff in a privatisation effort at some later stage? If there is no intention by the Government to become involved in that quasi junk fund field—as I am sure there is not—will the Minister kindly explain what kinds of expenditure are anticipated? Presumably capital expenditure is envisaged because the rest is provided out of the Vote.

It seems extraordinary that those figures should increase so greatly. Even the rate of inflation, about which the noble Earl is extremely sensitive and about which the country is sensitive, if added to the original £250 million would not account for the ultimate figure of £4 billion. Even the United Kingdom has been a little more restrained in its inflation record than that.

Unless the noble Earl provokes me, which is unlikely, this is purely a probing amendment to find out the Government's intentions. If he can reassure me on the matter, I am sure that we can arrive at an amicable solution. I beg to move.

The Earl of Caithness

Our aim in setting the initial limit was to make it sufficient to cover the lifetime of a Parliament; that is, a period of five years. Beyond that, we would expect the Government to have to seek an order increasing the initial limit if they wished to set up further trading funds. That is consistent with most other statutory provisions covering the borrowing limits of public sector organisations, although I admit at once that determining the precise figure is subject to many uncertainties, not least on how quickly new trading funds will be set up.

In order to reach a judgment of what would be a suitable figure, we first looked at the present day equivalent of the limit of £250 million set in the 1973 Act. That gave us a figure of some £13 billion. However, given that we expect significantly more trading funds to be set up under the new powers, the presumption must be that that figure is too low. I am sure that the noble Lord will wish to take that point on board.

Accordingly, we looked at the number of bodies which might become trading funds in the course of time, based on agencies already established and the candidates listed in Annex A of the White Paper. That is not an easy judgment as it does not necessarily follow that all bodies listed in Annex A which fall within the powers will necessarily become trading funds.

Equally, other bodies not listed in the annex could become trading funds within five years of the Bill being enacted. What is clear is that the initial list of likely candidates in terms of both numbers and size is significantly more than the number of organisations named in the 1973 Act. All things considered, this suggested that a figure of £2,000 million was not unreasonable and that is the figure that was accepted in another place. Equally, I have to say that on the reasoning set out already and which I have described, a figure of £500 million would certainly be too low. In real terms it is less than two-fifths of the limit set in the 1973 Act. Further, it takes no account of the fact that the Government's clear intention set out in the White Paper is to set up significantly more trading funds under the amended legislation.

The second amendment would remove the power to increase the initial borrowing limit by affirmative resolution order up to a maximum of £4,000 million. I find it difficult to understand why the noble Lord takes exception to what is a well precedented and sensible approach adopted by governments of both parties. I know that the 1973 Act itself does not contain such a power but subsequent legislation—for example, in relation to nationalised industries—normally does so. The requirement for affirmative resolution procedure for any order ensures that Parliament will always have an opportunity to consider and debate any proposed increase.

The provision raised no difficulty in another place where it was expressly considered, because by accident the Bill as originally introduced left out the order-making power which is now contained in Section 2B(9).

On the question of the coverage of borrowing limits, capital expenditure and working capital are the important points to remember. There is no clear relationship between a body's annual expenditure and its accrued borrowing requirement over time.

With regard to privatisation, I note that Amendments Nos. 4 and 7 tabled in the name of the noble Lord, Lord Bruce, deal more specifically with this matter. I can give the noble Lord an absolute assurance on privatisation: namely, that the Bill does not contain power to enable a trading fund to be privatised without subsequent primary legislation.

I hope that I have now been able to calm the worst fears of the noble Lord and that he will see that the Government's solution to the problem proposed by the increased number of trading funds is indeed the right one.

8 p.m.

Lord Bruce of Donington

I am most grateful to the noble Earl for his reply. The fact that the other place did not seem to worry very much about this matter raises the point that this Chamber very often tends to take a rather closer view than is sometimes possible in the other place. I must say that I am a little surprised that 17 years after the passage of the original Act in 1973, which involved only a £250 million borrowing power, the increase should have been so large.

The noble Earl says with some justification that the Government's wish to form outside agencies knows no bounds. We are well aware of the general political and philosophical thrust of the Government in these matters: privatise wherever possible, hive off wherever possible and take detailed responsibility away from Ministers wherever possible. One understands that. But the figures still remain very large indeed.

I gave the figure for the whole of the expenditure of the agencies on an annual basis, which was disclosed in the document to which I referred; but the very essence of the agencies that will be subject to trading funds is that they are already trading and that by and large their receipts exceed expenditure. Indeed, almost by definition they are already successful trading entities which derive the bulk of their income from the sales or proceeds of the services that they provide. Prudence would surely dictate that out of the profits that they make—and I have to refer only to Her Majesty's Stationery Office which must make a considerable profit—they ought to be able to make provision for their own working capital and, certainly so far as concerns HMSO, for the bulk of their capital expenditure as well spread over a period of time.

Therefore I still cannot understand the reason for those extremely large figures. I sincerely hope that on reflection the noble Earl will investigate this matter a little further with a view to complying with my original request to give some indication as to what these funds would be required for by trading agencies, in addition to the funds already at their disposal or made available from time to time through the Vote or even by realisation of capital assets which may become obsolete.

However, I do not desire to pursue the matter, especially when we are discussing tonight rather more controversial matters that are already before this Chamber in the Bill on Report. I shall leave the matter there, and I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 3 not moved.]

Lord Bruce of Donington moved Amendment No. 4: Page 6, line 8, leave out ("or be Financed by other means").

The noble Lord said: The amendment is designed to deal with the vexed question of possible privatisation of some of the agencies already operating under the control of Ministers. The amendment seeks specifically (at page 6, line 8 of the Bill) to delete from the existing subsection the words: or be financed by other means". The subsection as amended would therefore read: This section applies where any operations for which a trading fund is established are to cease to be funded operations (whether the operations ceasing to be funded represent the whole or part of the funded operations or are to cease altogether or be funded operations of another fund)".

There is no explanation so far as to what the words, or be financed by other means", imply in terms of law. Therefore I am anxious that this subsection should be rather more closely defined.

Associated with this amendment is Amendment No. 7, which seeks to insert a new clause after Clause 2 in order to button up the matter satisfactorily. The new clause reads: Save as specifically provided for in section 4A of that Act none of the powers conferred or delegated under this Act shall be interpreted as permitting the disposal of any or all of the assets of any agency to which this Act applies or dealing with any or all of its liabilities otherwise than in the normal course of its business or related activities".

I am well aware of and accept the fact that the noble Earl has informed me in writing and has repeated today that there is no intention to privatise these agencies. Unfortunately the matter is still not without some doubt. I refer to the evidence given by Mr. Richard Luce to the Treasury and Civil Service Select Committee, reproduced in its eighth report dated July 1988 (which is quite recently). He said: We confess to being slightly confused by the relationship between the Next Steps and the Government's privatisation policy". As the Committee will recall, Next Steps was the Government paper dealing with the Government's intention to set up various agencies.

The Eighth Report states: The essential thing in any individual case is to avoid uncertainty. If an announcement that part of a department is to become an agency is greeted by suspicions that it might later be privatised, such uncertainty could well damage efforts to improve efficiency and the quality of service. If the organisation is to be privatised it should be made clear at the outset that this is so". However, that is refuted a little later by further evidence given to the Public Accounts Committee in its 38th Report of October 1989. It states: Next Steps is primarily about those operations which are to remain within Government. But it cannot be ruled out that after a period of years Agencies, like other Government activities, may be suitable for privatisation. Where there is a firm intention of privatisation when an Agency is being set up, this will be made clear".

As recently as 23rd January of this year, in giving evidence to the Treasury at the Standing Committee stage of the Bill, Mr. Peter Lilley, Financial Secretary to the Treasury, stated: The vast bulk of the agencies are by their nature, unsuitable for privatisation. However, we cannot rule it out absolutely across the board because in certain cases it will be appropriate, and circumstances may change so that some agencies fall into the category[...] which were not there initially. But that will be comparatively rare".

There are already therefore sufficient statements on the record that would make it possible for a government, if they were so minded—on the assumption that the Government are returned after the next general election; I agree that that is a matter of some doubt—to be able to cross their hearts and say, "We warned you of this policy in the evidence that we gave to the Treasury Select Committee and to the Standing Committee." It is for the avoidance of doubt that I venture to put forward this series of amendments so that the position will be completely buttoned up.

I accept that the declaration of the noble Earl that there was no such intention was made in good faith. I do not question the Minister's integrity in the slightest. However, governments change and, as we have seen over recent years, their personnel are occasionally subject to reshuffles. It would be far safer, in my view and that of my colleagues, to have legislation on the statute book which closed that possibility.

The words of my amendment may not be those which become legally enforceable or which would pass the eagle eye of the Government draftsman. At a later stage I may seek the noble Earl's aid to secure a satisfactory form of words to achieve what I wish to accomplish. If the noble Earl agrees that there is no possibility of privatisation of the various agencies, he should raise no objection to the incorporation of such wards within the statute. After all, the Bill has been under consideration for some considerable time and one; could hardly complain if an endeavour were made to sharpen it up, and to insert clauses which incorporate the intentions that the noble Earl has been kind enough to indicate. I beg to move.

The Earl of Caithness

The noble Lord, Lord Bruce of Donington, has the respect of all members of the Committee. I was grateful to him for reaffirming his strong belief in his party's principles of nationalisation.

From what the noble Lord, Lord Bruce, said, noble Lords will have noted the enormous amount of work and diligence that he has put into preparing for the Bill. On a previous amendment he stated that another place does not necessarily devote the time that we do to scrutinizing legislation. But without question the noble Lord has put in many hours on the Bill. We are grateful to him.

The Committee will agree that it is not the time to discuss the merits of privatisation, on which I know there are genuine differences. Those are so great that the noble Lord and I would never agree on the correct solution. However, I wish to take the opportunity to make it clear that the new Section 4A provides a means by which operation may cease to be funded by a trading fund. It is intended to cover three options. First, it provides for the case where activities cease altogether. Secondly, it allows activities to be funded by means of another trading fund. Thirdly, it allows activities to revert to being funded through the normal processes of parliamentary supply rather than through a trading fund.

The wording is new Section 4A(1), which provides for the third option, is, or to be financed by other means". It is that wording which has raised what in my view are perfectly understandable doubts. I am therefore happy to make it absolutely clear on the record that I am advised that, read in the context of the Bill, the words, "financed by other means" have to be construed as carrying the implication of continuing Government finance. They do not, therefore, provide for privatisation.

The noble Lord quoted some extracts from the Treasury Select Committee reports. Like my honourable friend Mr. Lilley, the Financial Secretary to the Treasury, I cannot absolutely rule out privatisation of a trading fund for the future; nor indeed would I wish to do so. However, if it were to happen, it would require further primary legislation as indeed is happening with the Crown Suppliers. The Bill does not provide a means of bypassing the need for further legislation.

I understand the noble Lord's concern on the matter. Perhaps he will allow me to reflect further to see whether or not there is a form of words which will satisfy him. I give him no commitment but obviously I shall try.

Lord Bruce of Donington

I am most grateful to the noble Earl for the very careful way in which he has phrased his reply to the arguments that I have ventured to lay before the Committee.

In view of the very emphatic assurances that he has given, and his undertaking for a further review, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8.15 p.m.

Clause 2 [Minor and consequential amendments related to section 1]:

Lord Bruce of Donington moved Amendment No. 5: Page 8, line 21, after ("accounts") insert ("prepared and presented in both form and content complying with good commercial practice and accepted accounting standards currently in force").

The noble Lord said: The amendment seeks to amend Clause 2 at page 8, line 21 after "accounts" by inserting the words on the Marshalled List.

There is little argument between the noble Earl and myself on the desirability of the accounts of these agencies, in particular those involving government trading funds, being presented in proper form. The question is: what is proper form? In their original White Paper the Government agreed that accounts in commercial form would be published. That goes part of the way towards meeting the requirement for good accounting.

A point is given to the amendment by the fact that the Intervention Board for Agricultural Produce, which recently attained agency status, was the subject of detailed comment by the National Audit Office. I do not wish to weary the Minister too much or to detain the Committee for too long. However, we should note the findings of the audit office in relation to the accounting and financial reporting systems currently used by the intervention board which has become an agency for the purposes of the Next Steps procedures already adopted. I wish to quote from the report because the findings are important and they lie at the root of a great deal of my anxiety. Paragraph 14(b) states; The Board's two UK Parliamentary Vote accounts relate to the UK financial year, are cash-based, show administration separately from scheme expenditure, do not link Community contributions to individual schemes, and do not disclose assets and liabilities".

If agencies are to operate and have proper accounts prepared and presented to the public they must provide as correctly as possible for assets and liabilities of the agency. Sometimes they will include contingent liabilities for which provision in commercial accounts is often made by the next report on the accounts. We all know that commercial accounts, even accounts prepared under the Companies Act 1985 and those passed since, frequently exhibit deficiencies. However, that is no reason why one should not attempt to present accounts, particularly for trading agencies which are the subject of the Bill. Why should not the effort be made to prepare and present accounts in what we call good commercial form? Incidentally, the term "good commercial practice" used in relation to accounts is a phrase well understood in law. Its definition has been accomplished many times within various judgments given by the courts in relation to commercial accounts. Likewise, currently accepted accounting standards are progressively becoming the rule and are being taken into account by the courts which are often called upon to adjudicate upon them.

I wish to go even further, particularly in relation to the intervention board which is now an agency. Paragraph 14(c) states: The Board's Intervention Buying Accounts show the year-end position and movements in the Board's intervention stockholdings—an an accruals basis—and the direct costs of stockholding. But they do not show the indirect administrative costs of stockholding or link operational costs to individual commodities". Paragraph 14(h) states: The Board's accounting systems, while sufficient for producing the cash-based UK Vote accounts, do not contain all the information needed to assemble the accounts required by the Community or the Intervention Buying Accounts. These have to be compiled and reconciled manually and laboriously. A new accounting system will be phased in during 1991". That is one example.

We all know, and it has often been a matter of comment, that because they find it convenient so to do the Government generally prepare their accounts on a cash-in and cash-out basis. Occasionally they indulge in creative accounting; for example, by treating income received from the sale of assets in their possession not as receipts but as negative expenditure. That is a rather tongue-twisting term that has avoided the necessity for including it among ordinary receipts.

We wish to make sure that the agencies which fall within the ambit of the Bill prepare their accounts in the ordinary and conventional way. The noble Earl was kind enough to provide me with the pamphlet Trading Accounts: A Guide for Government Departments and Non-Departmental Public Bodies as published by the Treasury. Annex A makes quite clear the kind of profit and loss account and balance sheet formats, as appropriate, that would normally be required. Why they should not be required within such agencies eludes me. Surely there can be no reason why such agencies, particularly as the detailed day-to-day responsibilities are taken away from the Minister, should not conform to the best commercial practice. After all, the main thrust behind the formation of such agencies, particularly those which are subject to the Bill, is to make them more efficient in commercial terms.

The dead hand of government would be taken away from them. Presumably the dead hand of government includes the ridiculous concept of keeping one's accounts on a cash-in and cash-out basis, so beloved by the Treasury. Therefore, why should the Government resist incorporating what I intended to be a perfectly helpful amendment in order to give statutory sanction to the presentation of accounts as is done by ordinary trading organisations?

It is difficult to make cross-references to the Companies Act 1985 and to succeeding Companies Acts. A particular contortion of wording would be required in order to convert the limited company situation into that of an agency. Limited companies have certain statutory responsibilities in regard to their accounts which are inseparable from their share and capital structure, the rights given to certain types of shares, the various lengths of time for the satisfaction of their liabilities, the nature of their assets, and so forth.

However, within the scope of the document—and the noble Earl was most careful to provide me with a copy—I believe that the words of my amendment square amply with the principle of the pamphlet. In fact, this pamphlet is tailor-made for the job. Why should it not be given a statutory authority for the avoidance of any doubt?

I have a professional interest in such matters and I may have been a little discourteous, for which I apologise to the noble Earl. I believe that he understands the general thrust of my argument, and for the life of me I do not see why the provision cannot be incorporated in statute in the words that I ventured to place upon the Marshalled List in my amendment or in a suitable amendment which may occur to the noble Earl upon reflection. I beg to move.

8.30 p.m.

The Earl of Caithness

I am grateful to the noble Lord for moving the amendment. It gives me an opportunity to set out clearly for the Committee the Government's intentions with regard to the form of trading fund accounts.

I agree with the noble Lord. I do not believe that there is any difference between the noble Lord and the Government with regard to our ultimate objectives. I have discussed these matters with the noble Lord outside the Chamber and I have explained the Government's intentions in a letter to him which forms the basis of what I shall now say to the Committee. I have also listened carefully to what the noble Lord said in moving his amendment. If there is any difference between us, it relates to the best means of achieving our objectives and not to the objectives themselves.

Our intention, which I know the noble Lord shares, is to have a clear, consistent and transparent framework for the preparation of trading fund accounts. That is why the Bill follows the normal precedent as, for example, in nationalised industry legislation of giving the Treasury power to issue directions in relation to the form of accounts and the methods and principle on which they are to be prepared either generally or in relation to specific funds. We intend to make any general directions available to Parliament by laying copies of the directions before Parliament. Where directions are specific to any particular trading fund, we would expect that fund to publish those directions as part of its accounts which, by virtue of Section 4(6) of the 1973 Act, would be laid before Parliament.

The reason for dealing with these matters in directions, rather than in primary legislation, is the one which the noble Lord himself stated during the Second Reading debate. Accounting concepts have changed considerably over the years, and we would expect continuing development in the future.

I must congratulate the noble Lord on his skill and ingenuity in trying to draft a suitable amendment. However, I have to say that his amendment, and I believe any similar approach, fails on two counts. First, by referring to good commercial practice and accepted accounting standards, which are essentially private sector led, it implies that private sector requirements should dictate, both in spirit and in detail, what is best for the public sector. I am sure that the noble Lord recognises fully that there are some genuine differences between the public and private sectors which can require different accounting treatments. However, the amendment does not recognise that. Secondly, the amendment implies that innovation to meet the requirements of the public sector should be constrained by private sector practice. Again, practical experience, for example, in relation to inflation accounting, shows that this is not so.

I should also make clear that in encouraging best accounting practice we supplement accounts directions with guidance. We have recently consolidated and updated existing guidance on trading accounts in a Treasury booklet which has the title Trading Accounts: A Guide for Government departments and NDPBs. Indeed, the noble Lord referred in particular to Annex A. I am sure that the noble Lord has taken clearly on board Annex C which deals with accruals-based accounting. Agencies are either government departments in their own right or part of a government department. I believe that that guidance gives the clearest possible indication of our intention that trading fund accounts should be commercial-style accounts reflecting best practice.

The noble Lord raised the question of the NAO report on IBAP. We shall read the report with great care and interest before responding to it.

I believe that the proven arrangements which I have described are the best way of achieving the underlying objectives of both the Government and the noble Lord. I must be honest with the noble Lord. I cannot give to this amendment the same consideration as I said I would give to the previous amendment.

Lord Bruce of Donington

Once again I am grateful to the noble Earl for his explanation. I am even more grateful for the publication which he was kind enough to leave with me, produced by none other than the Treasury itself. That underlines precisely what I have said. For example, Annex A sets out the draft format of a profit and loss account and balance sheet prescribed in the Companies Act 1985 and recommended for public sector bodies. These are public sector bodies. Annex B sets out some aspects of the accounting and disclosure requirements of the Companies Act 1985 and statements of standard accounting practice as they apply to accruals-based accounts prepared by public sector bodies. There is nothing between us as to the concept.

The Government have been kind enough to put themselves into print in the particular document to which I have referred. I am rather at a loss as to why they are afraid of giving their own publication official sanction within a Bill which deals with the public bodies to which the noble Earl referred.

I hope that the noble Earl will give this matter further consideration. I take note of what he said about the wording which I have used. However, I believe that there must be a way of marrying what appears to be the Treasury concept and my own. They appear to be identical. There must be some way of expressing that in the Bill. On the basis that I intend to return to the matter again on Report, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Caithness moved Amendment No. 6:

Page 8, line 28, after ("require") insert: ("(6B) Where any enactment (other than this Act) requires, in whatever terms, a report to be prepared for any period as to the funded operations and sent to any person, or laid before Parliament, or both or so sent or laid by any time or times, an order may provide for that requirement to be treated as satisfied by preparing the report for the financial year and sending it to that person, or laying it before Parliament, or both or, as the case may be, so sending or laying it by the time or times specified in the order.").

The noble Earl said: This amendment is intended to deal with a problem which so far as we know is confined to the Patent Office, although the amendment would also cover any other similar cases. The Patent Office is required by legislation to produce an annual report on a calendar year basis. The intention underlying Sections 4(6) and 4(6A) of the Bill is that trading funds should be able to produce and publish a combined annual report and accounts.

Since the Patent Office works on an April-March financial year (which is also likely to be the financial year if the Patent Office were given a trading fund), to meet this requirement the Patent Office would either have to change its financial year to the calendar year or publish two separate annual reports. On consideration I am sure that Members of the Committee will understand the necessity for trying to amalgamate that. The amendment would solve the problem which I have highlighted by making it possible for a report produced for a fund's financial year to be treated as satisfying any other statutory reporting requirement. I beg to move.

Lord Bruce of Donington

I do not wish to detain the Committee very long on what may be a technicality. The noble Earl said that, so far as is known, the Patent Office provides the only exception of which account must be taken. Let us assume that that is so. What is the objection within this Bill to amending the appropriate sections of the statute which require the Patent Office to do certain things and bring it within the ambit of the Bill? One would need only to change the Act which lays down what the Patent Office must do and incorporate the amendment at the end of the schedule into the existing Bill. Why contort oneself into perpetuating the exception which is being made in respect of the Patent Office? That seems to me the last word in administrative convenience. Perhaps the noble Earl can elucidate on that point. Would it not be simpler to bring the Patent Office into line rather than make the particular exception which the noble Earl proposes to make by his amendment?

The Earl of Caithness

I apologise to the noble Lord for not making myself as clear as I should have liked in moving the amendment. It is for convenience that we seek the amendment and hope that the Committee will agree to it.

It is for the reason given by the noble Lord, which I mentioned earlier, that we have phrased the amendment as it now appears on the Marshalled List. Should there be another example in addition to the Patent Office I am sure that the noble Lord agrees that further primary legislation would be required to deal with the matter. The amendment prevents that.

Much as I should enjoy debating such a measure with the noble Lord, on reflection I am sure that he will agree that this is the better way of achieving our purpose.

Lord Bruce of Donington

I am grateful to the noble Lord for his reply at this stage. I do not wish to nit-pick over a small matter of this kind. I was curious. I sincerely hope, given the Government's impending colossal legislative programme, it will not be necessary to distort the position further by passing a special Act to accomplish the purpose I had in mind.

I accept the explanation given by the noble Lord. I was merely trying to help—always a dangerous thing for the Opposition to do. On the basis of the reply that he has given I am prepared to support the amendment.

On Question, amendment agreed to.

Clause 2, as amended, agreed to.

[Amendment No. 7 not moved.]

Remaining clauses and Schedule agreed to. House resumed: Bill reported with amendments.

Lord Henley

I beg to move that the House do now adjourn during pleasure until 15 minutes before nine o'clock.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.42 to 8.45 p.m.]