§ Mr. Higginsasked the Chancellor of the Exchequer what rate of interest is currently used by the civil service when calculating the cost of capital invested in cars purchased by the Civil Service; and how this compares with his estimate of the cost of borrowing for car purchase by a private individual.
§ Mr. LawsonIt is the practice of the Government to acquire motor cars by means of outright purchase. Departments are required to use a discount rate of 5 per cent. in real terms in appraising such investments. The cost to a private individual of borrowing for car purchase is likely to be more than this; the difference depending on how the purchase was financed—for example by a bank loan or under a hire purchase agreement.