Skip to main content

Investment Appraisals

Volume 458: debated on Monday 19 March 2007

To ask the Chancellor of the Exchequer what the Government’s cost of capital is for the purpose of investment appraisals and cost comparisons; how this figure is arrived at; how often and against what criteria it is reviewed; and if he will make a statement. (127979)

The Government use a discount rate of 3.5 per cent. in real terms in central Government appraisals. This reflects the social time preference rate rather than the cost of capital. The rate is kept under constant review. Further information is contained in “The Green Book: Appraisal and Evaluation in Central Government”.