HC Deb 28 February 1983 vol 38 cc20-1W
Mr. Andrew F. Bennett

asked the Chancellor of the Exchequer if he will list, for each of the Crown services for which a trading fund has been established under the Government Trading Funds Act 1973, the current financial objectives set out in a Treasury minute laid before the House of Commons under section 4(1)(b) of that Act.

Mr. Brittan

The current financial objectives set under section 4(1)(b) of the Government Trading Funds Act 1973 are:

(a) The Royal ordnance factories: For the period 1 April 1979 to 31 March 1984, to earn an excess of revenue over outgoings properly chargeable to revenue account, after interest on short-term borrowing but before interest on long-term borrowing, sufficient to provide for (i) additional depreciation on the difference between historic cost and replacement cost of fixed assets, (ii) the difference between the cost of sales at historic cost and current cost and (iii) a return of at least 5 per cent. per annum on the average net assets employed at current values.

(b) The Royal Mint: For the period 1 April 1981 to 31 March 1984, to achieve an annual rate of return which when averaged over the period as a whole will be equal to not less than 11 per cent. per annum. The annual rate of return for each of the three years is specified as the rate of current cost operating profit as a percentage of the average net assets at current cost.

(c) PSA supplies: For the period 1 April 1981 to 31 March 1984, to achieve a return of 5 per cent. in the form of a current cost operating profit (as defined in the Statement of Standard Accounting Practice No. 16) expressed as a percentage of average net assets employed at current values.

(d) HMSO: For the period 1 April 1980 to 31 March 1985, to earn an excess of revenue over outgoings properly chargeable to revenue account, after interest on short-term borrowing but before interest on long-term borrowing, sufficient to provide for:

  1. (i) additional depreciation on the difference between book value and replacement costs of fixed assets (to the extent that such amounts are not already included in outgoings); and
  2. (ii) cost of sales and monetary working capital adjustments as defined in Statement of Standard Accounting Practice No. 16 of the Accounting Standards Committee (relating to current cost accounting); and
  3. (iii) 5 per cent. per annum of the average value of net assets employed at current values.

Mr. Andrew F. Bennett

asked the Chancellor of the Exchequer if he will list, for each of the Crown services for which a trading fund has been established under the Government Trading Funds Act 1973, the proportion of the payments made into the trading fund made by the Minister of the Crown responsible for the administration of the service in respect of activities deemed essential in the national interest but requiring financial subsidy, in the way that he proposes to fund certain activities of the Ordnance Survey under an agreement.

Mr. Brittan

Payments made into the trading funds in respect of activities deemed essential in the national interest are:

(a) The Royal ordnance factories: At the request of the Ministry of Defence, the Royal ordnance factories maintain reserved capacity. Payments to the ROFs by MOD on this account are estimated at £5 million for 1982–83, about 1 per cent. of turnover.

(b) The Royal Mint: Under the contract between the Treasury and the Royal Mint for the provision of United Kingdom coinage, the Treasury seek to ensure that adequate facilities are maintained to meet all likely demands for coin. The overall effect of these arrangements, including the substantial advantage to the Treasury of issuing coin, cannot be broken down in a way which would fit with the concept of a subsidy for particular activities referred to in the question. All payments made by the Treasury relate to the supply of coin.

(c) HMSO: Payments of £5.2 million and £0.7 million were made in 1981–82 to the Her Majesty's Stationery Office trading fund. They compensated the fund for much of the loss that would otherwise have been sustained as a result of selling reports of Parliamentary debates below cost, and publications to public libraries at half-price. The total turnover of the HM Stationery Office trading fund in 1981–82 was £251 million.

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