§ 4. Mr. Ridsdaleasked the Minister of Power what has been the net return on capital employed in the nationalised coal, gas, and electricity industries, respectively, in the last year; and how this compares with the average for the last five years.
§ Mr. FreesonThe net return after depreciation in 1965–66 was, for gas, 5.4 per cent., and, for electricity, 7 per cent., the five-year averages 1961–66 being 5.1 per cent. and 6.4 per cent., respectively. In the case of coal, the figure was affected by deferment of price increases and amounted to only .03 per cent. as compared with 4.2 per cent. for the last five years. With permission, I shall circulate explanatory notes in the OFFICIAL REPORT.
§ Mr. RidsdaleAs the net return is only one-third of what can be earned in private industry, do not these figures cast grave doubts on the Government's policy of pressing ahead with further public control and nationalisation?
§ Mr. FreesonNo, Sir. The hon. Gentleman is quite wrong in this matter, particularly since comparisons with the 7 private sector are misleading, as indeed the previous Conservative Government explained in their White Paper on the Financial and Economic Obligations of the Nationalised Industries. Regarding the hon. Gentleman's last remarks, I would point out that in relation to the steel industry, the rate of return in 1965–66 seems likely to be at about 4 per cent.
§ Following are the Explanatory Notes:
- 1. Net return for this purpose consists of surpluses (or deficits) and interest.
- 2. The National Coal Board, 1965–66, figure is calculated after allowance for the capital reconstruction carried out in that year. The average is in respect of the Boards accounting years 1961, 1962, 1963, 1964–65 and 1965–66. Because of the change in the Board's accounting year the return for 1963 has been assumed to be 12/15th of the figure for the 15 months period ended March, 1964.
- 3. The Gas figures are for England, Wales and Scotland; the Electricity figures for England and Wales only.