Nationalised Industries

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 9th March 1965.

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Photo of Mr Julian Ridsdale Mr Julian Ridsdale , Harwich 12:00 am, 9th March 1965

asked the Chancellor of the Exchequer whether he is satisfied that an adequate return is being achieved on the capital invested in the nationalised industries; and if he will make a statement.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

Nationalised industries are expected to earn a reasonable rate of return on capital invested in them. I am satisfied that their financial objectives take this requirement into account.

Photo of Mr Julian Ridsdale Mr Julian Ridsdale , Harwich

Does the Chancellor think it right that there has been a price rise of 150 per cent. on certain season tickets in the past ten years in spite of the investment of £1,200 million in British Railways in the same period?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

What has always to be remembered about the nationalised industries, especially the railways and coal, is that they are not capital intensive. Any general increase in wage rates must be reflected to a very much greater extent in the railways than in a great many other industries, and rises in fares are bound to follow rises in wages of this sort.

Photo of Mr Eric Ogden Mr Eric Ogden , Liverpool, West Derby

My right hon. Friend mentioned coal. Will he compare the increased productivity of the coal industry with that of private enterprise?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

I am glad to say that the increase in productivity in the coal industry last year was over 6 per cent. and in 1962 it was over 8 per cent. These are very valuable assets.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

Will the Chancellor confirm that he will be adopting the same targets as the previous Government did as regards the nationalised industries, and that this will extend to B.O.A.C. also for the writing off of the deficit and for the contingency allowance which he has agreed to make?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

I answered a question in those terms about two months ago. That does not mean that I should not feel entirely free to review the basis of earnings in the industries, but the targets as targets are acceptable.

Photo of Mr Julian Ridsdale Mr Julian Ridsdale , Harwich

In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.