HC Deb 06 August 1976 vol 916 cc1198-200W
Mr. Knox

asked the Secretary of State for the Environment if he will give the number of discretionary improvement grants made and the total amount involved during each of the past 12-month periods for which figures are available in the Leek parliamentary constituency.

Mr. Armstrong

Figures are available only for local authority areas. In the Staffordshire Moorlands district improvement grants have been approved as follows:

March 1976; and how it differed from the bank rate or minimum lending rate;

(3) What factors he takes into account and with whom he consults when fixing the test discount rate in relation to transport investment proposals;

(4) what interest rate is added to the test discount rate when appraising proposals for investment in road construction;

(5) what was the average rate of return expected and realised on investments in each of the financial years from 1970–71 to the latest available date in (a) the British Railways Board and (b) the British Waterways Board.

Dr. Gilbert

The test discount rate is prescribed by the Treasury for all public sector capital investment and has been fixed at 10 per cent. per annum in real terms since 1969. Proposals for investment in roads and by the surface transport nationalised industries are, therefore, normally expected to show at least this rate of return. A lower rate may be accepted where a proposal offers additional environmental or other unquantifiable benefits and a higher rate may be required to offset higher risk. Because the test discount rate is expressed in real terms it bears no direct relationship to current lending rates. Information about annual rates of return achieved since 1970–71 is not available on a consistent basis. A more detailed description of the use of the test discount rate in transport investment appraisal is given in Paper 5 of Volume 2 of the Transport Policy Consultation Document published in April this year.

Mr. David Watkins

asked the Secretary of State for the Environment if he will list categories of capital investment in transport where he provides the loans together with the rates of interest charged.

Dr. Gilbert

My right hon. Friend provides loans to the nationalised surface transport industries towards the financing of their capital investment programmes. He also lends to harbour authorities for investment in certain approved harbour development schemes, and to various authorities responsible for construction of the Humber Bridge and Dartford, Mersey and Tyne Tunnels. Interest is charged at the appropriate Government lending rates for the loans in question. At 1st August 1976 the rate for loans repayable by lump sum on maturity were as follows:

Period of Loan Percentage
Exceeding Not exceeding per annum
1 year 11½
1 year 5 years 12⅜
5 years 10 years 14⅛
10 years 15 years 14½
15 years 25 years 14¾
25 years 14⅞

Mr. David Watkins

asked the Secretary of State for the Environment (1) whether he takes into account the results of financial and cost benefit appraisals of transport investment projects when considering the size of the overall transport investment programme for forthcoming years;

(2) what factors he takes into account in determining the size of the transport investment programme in forthcoming years.

Dr. Gilbert

The size of the transport investment programme is determined by the resources which can be made available for it. Financial and cost benefit appraisals are used where appropriate in considering individual projects for inclusion in the programme.

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