HC Deb 23 April 1968 vol 763 c7
9. Mr. Ridley

asked the Minister of Power by how much the capital programmes of the coal, gas and electricity industries would be reduced by an increase in the discount cash flow rate of 10 per cent.

Mr. Freeson

An increase in the test rate of discount could be expected to lead to some reduction in capital expenditure, for example, through the effect it might have on the prices of coal, gas and electricity; but no realistic estimate of the reduction is practicable at present.

Mr. Ridley

As nationalised industry borrowing is giving grave concern not only to hon. Members but to Mr. Schweitzer as well, ought not the Government to know what the effect would be of applying their own policy of raising the test discount rate, when the total gets out of hand? Why do they not know the answer?

Mr. Freeson

Raising the test discount rate would have the effect of increasing supply costs and would, therefore, have certain implications for pricing policy.