§ Mr. Allan Stewart
asked the Chancellor of the Exchequer what financial targets have now been agreed for each nationalised industry; and which industries achieved their targets in the last financial year and which did not.
§ Mr. Biffen
Financial targets have now been set for the following industries682WNational Coal Board?Break-even on profit and loss account after interest and special grants from 1983–84.Electricity (England and Wales)Average annual rate of return after current cost depreciation but before interest and tax of 1.8% on net assets valued (excluding work in progress) valued at current cost over the period 1980–81 to 1982–83.British GasAverage annual rate of return (related to current cost operating profit after depreciation but before interest and tax) of 9% on net assets valued at current cost over period April 1980 to March 1983.British SteelOperating at a profit in the 1980–81 financial year after providing for depreciation and interest.Post OfficeTelecommunicationsFive per cent. return on average net assets revalued to replacement cost (before interest, but after historic and supplementary depreciation) for each of the three years from 1979–80 to 1981–82 (as indicated in Cmnd. 7841, revision of the target for the remaining two years of the period is being considered). PostsTwo per cent. return on turnover (after historic and supplementary depreciation, and after interest) for each of the three years 1980–81 to 1982–83.GiroAverage annual return of 13% before interest on net assets over 1979–80 to 1981–82, plus £5 million over the three years towards reducing the accumulated deficit.British AirwaysOn average a rate of return of 6% before interest but after supplementary depreciation on mean net assets revalued at current cost, over the three financial years 1979–80 to 1981–82.
British Airports AuthorityOn average a rate of return of 6% per annum on net assets revalued to current cost over the three financial years 1980–81 to 1982–83.British RailThe industry as a whole is required to break even after receipt of grant at a predetermined level. The objective of individual businesses is to earn a current cost operating profit sufficient to achieve the required rate of return on investment after providing for all direct and appropriate indirect costs. In addition, interim targets have been set for the individual businesses as follows: SealinkFive per cent. rate of return on net assets valued at current cost (after current cost depreciation) by 1982.Inter-CityBy 1982 should achieve £28 million improvement (at 1979 prices) in 1978 level of contribution to total indirect costs of the railway after charging all direct costs, provision for full current cost depreciation and amortisation of the assets, interest and the net cost of train catering. FreightBy 1982 should aim to cover two-thirds of current cost depreciation and amortisation as opposed to 30% in 1978.British Transport Docks BoardTwenty per cent. on mean net assets by 1980 (before interest and tax, after historic depreciation).Scottish Transport GroupScottish Bus GroupTo make an operating surplus in 1980 of £7½ million after charging replacement cost depreciation and interest payments.Caledonian MacBrayne ferry servicesBreak-even in 1980 after receipt of grant. Scottish Transport InvestmentsSurplus of 8% on turnover for 1980, after charging for replacement cost depreciation.British ShipbuildersLoss (before tax, interest and extraordinary items) constrained to £100 million or less in 1979–80 after crediting intervention fund assistance: 1980–81 maximum trading loss of £90 million before crediting intervention fund assistance.British AerospaceTo seek to achieve trading profits, before launching costs and loan interest of £90 million in 1979 and of £98 million in 1980, equivalent to an average return of 21% on average net assets employed over the two-year period.
Most industries have not yet published their report and accounts for the last financial year. Of the industries which had specific financial targets for 1979 or 1979–80, only British Gas, BNOC, British Rail and British Aerospace have published their accounts; these industries met their targets.683W
§ Mr. Stuart Holland
asked the Chancellor of the Exchequer what has been the annual rate of price increase of the United Kingdom nationalised industries and services, including the National Enterprise Board subsidiaries, since 1974 in relation to the annual rate of price increase of private industry and services, respectively.
§ Mr. Biffen
[pursuant to his reply, 28 July 1980, c. 478]: Data on the prices of goods and services provided by the National Enterprise Board subsidiaries are not classified separately by the Department of Employment when collecting the information on prices for the construction of the retail prices index. Information is available for the prices of goods and services of other United Kingdom nationalised industries and on the prices of goods and services provided by the private sector. For the period 1974 to 1979 the annual rate of increase in the relevant price index was as follows:
Percentage annual increases Nationalised industries Private sector (excluding food) 1974 12.4 16.5 1975 36.0 23.3 1976 25.7 14.4 1977 12.3 15.6 1978 9.2 9.0 1979 8.6 13.4