§ Mr. ButlerTo ask the Secretary of State for Defence if he will make a statement on the report by the review board for Government contracts on its 1995 annual review of the profit formula for non-competitive Government contracts. [17547]
§ Mr. FreemanThe Government have accepted the overall target rate of return on capital employed as recommended by the review board in its report. The new rate will be 18.5 per cent. compared with the current rate of 18.2 per cent., both on the basis of historic costs. It will be effective from 1 April this year. There are other points arising from this report and from the board's report on the seventh general review in 1993 which officials will be discussing with the CBI as part of our continuing drive to secure maximum value for money from our defence contracts. The report has been printed and copies have been placed in the Library.