§ Mr. Stanley
asked the Chancellor of the Exchequer which nationalised industries have a statutory duty to achieve a specified return on capital stating the specified return in each case; and which nationalised industries have a statutory duty to break even.
§ Mr. Joel Barnett
The answer to the first part of the Question is "None". But the Civil Aviation Act 1971 requires that the British Airways Board must be set a reasonable target rate of return, unless some other financial duty is substituted by Order. The Iron and Steel Act 1975 provides that a reasonable target rate may be set for the British Steel Corporation. The statutes of all the nationalised industries contain provisions requiring them to break even, taking one year with another. In the case of the British Steel Corporation and the British Airways Board these provisions are suspended when they are set target rates of return. This is because the statutory provision for setting target rates of return for these two industries is related to the provision of public dividend capital (PDC) as a substantial element of their capital structure. Since dividends on PDC are not a charge to revenue account, the break-even obligation would be inappropriate.