§ Mr. Spearing
asked the Secretary et State for the Environment if, pursuant to his Written Answer of 18th May, he will list Her Majesty's Government's reasons for their policy that cost benefit tests rather than commercial ones are suitable for road improvements and construction, while commercial criteria, as usually applied to nationalised industries, must be applied to capital for major improvements to, or construction of, multipurpose waterways.
§ Dr. Gilbert
Financial appraisal is appropriate where the major effects of an investment decision are reflected by the cash flow of the agency concerned. Cost benefit tests are used where this is not the case. I would again refer my hon. Friend to Paper 5 in Volume 2 of the Consultation Document on Transport Policy for a full discussion of this topic.