HL Deb 22 May 1969 vol 302 cc465-6
THE EARL OF BESSBOROUGH

My Lord, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government whether they will make a statement on the test rate of discount used to appraise investment in the nationalised industries.]

LORD BESWICK

My Lords, the Government's policy on the use of a test discount rate is set out in the 1967 White Paper on the Nationalised Industries. A review of the case for the present rate of 8 per cent, is now in progress.

THE EARL OF BESSBOROUGH

My Lords, while thanking the noble Lord for that Answer, may I ask whether he can tell me why there is this delay, when in the Select Committee it was implied by Sir Alec Cairncross that the rate would have to be raised, especially in view of the fact that it has been rising sharply in the private sector?

LORD BESWICK

My Lords. I understand that the Government's reply to the Report of the Select Committee may already be in draft and the problem is one of distribution, which is being held up by Stationery Office difficulties. As to the difference between the rate here—8 per cent.—and the current interest, the noble Earl will understand that this rate of 8 per cent. in real terms is probably equivalent to something of the order of an 11 per cent. return on investment.

THE EARL OF BESSBOROUGH

My Lords, could the noble Lord assure us that he will press the Stationery Office to bring this information out as soon as possible, because there is some dismay at the delay in this matter?

LORD BESWICK

Yes, my Lords. I hope the noble Earl will not misunderstand me; it is a delay in the publication of the reply of the Government to the Report of the Select Committee. That does not necessarily hold up the action on any review. A review is now taking place and I am sure that the noble Earl will understand that this is a matter which ought to be considered very carefully before any change in the 8 per cent. rate is agreed.

THE EARL OF BESSBOROUGH

My Lords, can the noble Lord tell me when he expects the results of this review to be made known?

LORD BESWICK

It is hoped that the results will he known by the autumn.