§ Mr. Brightasked the Lord Privy Seal what financial regime is being applied to the incorporated Crown Agents.
§ Mr. Neil MartenThe incorporated Crown Agents came into being on 1 January 1980 by virtue of an order made under section 1(1) of the Crown Agents Act 1979.
In accordance with section 17, the Crown Agents have assumed a commencing capital debt of £30 million. The difference between the commencing capital debt and any excess of net assets over the commencing capital debt will be paid into the Consolidated Fund when audited figures are available.
Section 17 of the Act provides for an initial period during which interest on the commencing capital debt shall only be payable if the Minister so determines. I have determined that the interest to be paid for the first year shall be 20 per cent. of the rate determined by the Treasury under the National Loans Act 1968 which would apply to a loan of the same class and maturity. During the course of the first year I intend to set the level of interest payments for the later years of the initial period and will also be considering the appropriate financial targets under the provisions of section 13(3).
Under section 26 of the Act the liability of the unincorporated agents to make repayments in respect of the grants made in December 1974 and March 1978 towards the losses incurred by the unincorporated agents on investments made by them for their own account ceases immediately before the appointed day. Under paragraph 7 of schedule 5 the benefits of the grants and of the interest earned thereon accrue to the Holding and Realisation Board. Under paragraph 14 of schedule 5 any surplus reserves or assets of the board fall to be paid to the Consolidated Fund.
Copies of the Crown Agents Investment Regulations made under sections 5(4) and 15 of the Act and paragraph 13 of schedule 5 to the Act are being placed in the Libraries of both Houses.