§ 14. Mr. Biffenasked the Minister of Power what is the target return on capital employed he proposes to set for the British Steel Corporation; and how this compares with the estimated current return.
§ Mr. FreesonMy right hon. Friend has not yet settled a financial objective with the Corporation. In 1966–67 the nationalised steel companies' return on capital employed was 1.9 per cent. after depreciation but before tax and interest.
§ Mr. BiffenWould the hon. Gentleman not agree that utmost priority must be given to the determination of a return of interest? Could he say whether, in the pursuit of economic excellence, it is the intention of his Ministry to relate that return to the most profitable rates of return of North American and European steel manufacturers?
§ Mr. FreesonThe position is as laid down in guidelines in the White Paper on the Nationalised Industries, Cmnd. 3437, to which I have referred. To quote from it, the targets which we will be seeking to reach as soon as possible
…should reflect sound investments and pricing policy and not vice versa.That is a policy to which we shall adhere.