Skip to main content

Gas And Electricity Industries (Financial Targets)

Volume 961: debated on Tuesday 23 January 1979

The text on this page has been created from Hansard archive content, it may contain typographical errors.

asked the Secretary of State for Energy, in setting financial targets for both gas and electricity industries, why he has set a return on turnover after interest in one case and a return on net assets before interests in the other, rather than establish a uniform requirement.

The nationalised industries White Paper (Cmnd. 7131) states that the main form of financial target would be a percentage return, before interest, on the average net assets employed by the industry. It recognises that in one or two cases a target might be set in terms of a percentage return on turnover. Given that gas is a largely distributive industry a return on turnover, treating interest as a cost, is an appropriate measure of performance.