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Nationalised Industries

Volume 978: debated on Wednesday 13 February 1980

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asked the Chancellor of the Exchequer on what basis the Government determine which nationalised industries have their profit targets related to capital employed and those where profit targets are related to a return on turnover.

The form of a financial target must depend on the circumstances of the particular industry: it should be such as to be clearly understood and provide an effective discipline on the industry. In most cases this involves setting targets in terms of a return on net assets valued at current cost. However, in certain cases—for example, where an industry is labour rather than capital intensive—it may involve expressing an equivalent return in terms of turnover.