HC Deb 29 April 1969 vol 782 c1143
21. Mr. Kenneth Baker

asked the Minister of Power what is his estimate of the amount by which investment in gas would be reduced on the basis that the test discount rate was raised from eight per cent. to 12 per cent.

Mr. Freeson

No significant estimate can be given. Among many uncertainties are the effects which a higher return on new investment would have on tariffs—so affecting demand—and on investment to meet such demand.

Mr. Baker

What is the Parliamentary Secretary's view on the comment by Sir Alec Cairncross that the discount rate should be raised from 8 per cent. to 9 per cent.?

Mr. Freeson

I would not wish to make any coment on that statement at this stage.

Mr. Ridley

Since interest rates for capital for the private sector have gone up by very nearly 50 per cent. in the last two or three years, why has the test discount rate not gone up by a similar percentage?

Mr. Freeson

To answer that question I would have to deny the answer that I gave to the question asked by the hon. Member for Acton (Mr. Kenneth Baker), that I do not wish to make any comment at this stage.