§ Mr. Squireasked the Lord Privy Seal what arrangements are being made for the servicing of the Crown Agents' commencing capital debt.
§ Mr. Neil MartenIn accordance with the provisions of section 20(2) and (4) of the Crown Agents Act 1979 I have decided, after consultation with the Crown Agents and with the approval of the Treasury, that the commencing capital debt of the Crown Agents shall be refinanced over the five years of the initial period. This will be achieved by the Crown Agents repaying a predetermined proportion of their outstanding original capital debt at the end of each of the remaining four years of the initial period, and borrowing up to the same amount from the national loans fund. £6 million of the commencing capital debt was refinanced on 1 January 1981 at the appropriate NLF rate in force on that date. As regards interest, I have determined, in accordance with section 17(4) of the Act, that in 1981, as in 1980, the interest payable on debt outstanding to the Government should be 20 per cent. of the relevant NLF rate.
My primary concern is with the profitability before interest of the Crown Agents and I have been consulting them closely about setting them an overall rate of return target under section 13(2) of the Act, bearing in mind the returns which might be expected of private sector enterprises in broadly similar fields. I expect to set this target during 1981.