§ Mr. Laurance Reed
asked the Secretary of State for Trade and Industry what is the Government's reaction to the proposals by the accounting standards steering committee for dealing with the problem of accounting for changes in the purchasing power of money.
§ Mr. Peter Walker
Proposals that company accounts should reflect changes in costs and prices raise important issues, with implications forinter alia the efficiency of company management; the allocation of resources; investment decision taking; industrial competitiveness; corporate taxation; and counter-inflationary policy. In view of the wide range of national interests affected by the subject, the Chancellor of the Exchequer and I have decided to set up a small independent committee to consider the various methods of adjusting company accounts and whether, and if so how, company accounts should allow for changes in costs and prices, and to make recommendations.