HC Deb 06 February 1981 vol 998 c213W
Mr. Onslow

asked the Chancellor of the Exchequer when the profit formula on defence contracts was last reviewed; and on what basis it is currently calculated.

Mr. Brittan

The third general review of the profit formula for non-competitive Government contracts was carried out in 1980 and the review board's report was published on 28 October 1980 by Her Majesty's Stationery Office, ISBN 0 11 630292 5. The board's recommendations are the subject of discussion between the Government and the CBI at the present time. The board's report sets out in detail the basis of the calculation, which is on an historic cost basis. It recommended that a switch should be made to an inflation-accounting basis as quickly as possible.