§ Mr. Goldingasked the Secretary of State for Trade and Industry what target percentage returns on capital has been set for the gas boards for the present year; and how that target has been calculated.
§ Sir J. EdenAs announced in October, 1969, the gas industry's financial objective for the five years 1969–70 to 1973–74 is to earn a net return, after depreciation, of 7 per cent. on average net assets. After seeking the advice of the Gas Council and with the agreement of the area boards, the Government have settled the following objectives for the individual boards and the Council for that period.
372W The objective for the Gas Council is a net return of 8 per cent. In each case it will also be the aim at least to cover all costs, including interest charges and normal depreciation provision, over the five-year period.
Net return, after depreciation, as percentage of average net assets Scottish 6.5 Northern 8.5 North Western 7.0 North Eastern 7.5 East Midlands 8.0 West Midlands 8.5 Wales 6.5 Eastern 7.0 North Thames 7.0 South Eastern 7.5 Southern 7.0 South Western 6.5 The differing objectives take account of the varying financial state and prospects of each Board over the period. They do not imply differences in the expected profitability of new investment as between Boards.