§ Mrs. McCurleyasked the Secretary of State for Scotland whether he has yet agreed a new financial target and performance aims for the Scottish electricity boards.
§ Mr. RifkindCost reduction performance aims for the Scottish electricity boards were agreed for the three-years period to March 1986. After consultation with the boards I have decided to extend the period of the aims to March 1987, making appropriate adjustments to reflect the further costs reduction which can be expected in the additional year. The revised aim for generation and transmission activities is for the boards jointly to reduce controllable unit costs in real terms by 4.2 per cent. over the four-year period 1 April 1983 to 31 March 1987. Over the same period the South of Scotland Electricity Board will aim to reduce its controllable unit costs of distribution in real terms by 10 per cent. and similarly the North of Scotland Hydro Electric Board will seek to reduce this element of its costs by 5.5 per cent.
The joint financial target agreed with the boards for the period 1 April 1983 to 31 March 1986 was to make an average return of 1.75 per cent. on net assets valued on a current cost basis. The average return achieved by the boards was 2.23 per cent. I have now agreed a one year joint financial target with the boards of 2.7 per cent. for the financial year 1986–87.