§ Mr. Llew SmithTo ask the President of the Board of Trade (1) what is the reason underpinning the estimate of a 10 per cent. saving in total Magnox liability costs in the table setting out Magnox liabilities in his Departmental press notice P/95/310; [31119]
(2) what discount rate was adopted to calculate the present value of the net cash receipts for further operations in the table on Magnox liabilities issued in his Departmental press notice P/95/310 of 9 May; and what is the justification for its use. [31120]
§ Mr. EggarThe decision to assume a 10 per cent. figure for potential savings in the costs of Magnox liabilities was taken in the light of the views of advisers—KPMG—who looked at the specific question of nuclear liabilities for the nuclear review.
A discount rate of 3.5 per cent. was used to calculate the present value of net cash receipts for further Magnox operations, and is based on the current yield from 25 year index-linked gilts.