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Nationalised Industries

Volume 895: debated on Thursday 17 July 1975

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asked the Chancellor of the Exchequer what is the rate of interest on the most recent capital borrowings of each nationalised industry.

The terms on which overseas loans are raised by the industries normally remain a confidential matter between the borrower and lender concerned. Loans from the National Loans Fund are made at rates which vary according to the period of the loan—which relates to the average life of assets in the industry—and the method of repayment. The current applicable rates are:

Nationalised IndustryPeriod of Loan (Years)Rate per cent. per annum
National Coal Board1512⅛
British Steel Corporation1713⅞
Electricity Council2513⅞
South of Scotland Electricity Board2513⅞
North of Scotland Hydro-Electric Board2513⅞
British Airports Authority2013⅞
British Airways Board711¼
British Gas Corporation1011¼
British Railways Board2514¾
British Waterways Board2514¾
British Transport Docks Board1514¼
National Freight Corporation1013¼
National Bus Company1013¼
Scottish Transport Group1013¼
Post Office913¼
2914⅞

asked the Chancellor of the Exchequer what is his estimate of the cost to the nationalised industries of applying the agreed norm of an extra £6 a week to their workers; and by what percentage it is estimated this will increase their prices assuming other factors remain unchanged.

Wage costs are only one of the determinants of nationalised industry prices. However, with the lower rate of pay increase which will result from applying the limit of £6 a week there are good prospects that the rate of price increase in the nationalised industries as a whole should be markedly lower next year.

asked the Chancellor of the Exchequer whether the Government's policy, expressed in paragraph 19 of their White Paper "The Attack on Inflation" (Command Paper No. 6151) that they will not foot the bill for excessive settlements in the nationalised industries through subsidies, by permitting extra borrowing or by allowing excess costs to be loaded on the public through increased prices or charges, will cover applications by nationalised industries to raise prices and charges currently in the pipeline—e.g. British Rail, British Gas and the Post Office Corporation—following pay settlements before 11th July 1975.

The Government's policy as set out in Cmnd. 6151 applies to all wage settlements implemented after 1st August. The price increases now in the pipeline are necessary to enable the Government to achieve their objective of phasing out price restraint subsidies to the gas industry and to the Post Office and to limiting the subsidies paid to British Rail.