§ 6. Mr. Smallasked the Chancellor of the Exchequer if he will make a state- 612 ment on the recommendations of the National Incomes Commission in their report on the Scottish Plumbers' and the Scottish Builders' Agreements of 1962, Command Paper No. 1994.
§ 8. Mr. W. Hamiltonasked the Chancellor of the Exchequer what action he intends to take on the Report of the National Incomes Commission, Command Paper No. 1994;and if he will make a statement.
§ Mr. Boyd-CarpenterI think that we are indebted to the Commission for setting out so clearly and authoritatively its findings and recommendations, with its reasons, on the issues before it. Although the Report is concerned primarily with the Scottish plumbers' and builders' agreements which were under examination, it contains much which is of value in a wider context. I am sure that it can usefully be studied by all who are concerned with the determination of incomes and prices as they affect the national interest.
§ Mr. SmallIs the Chief Secretary aware that the case for the Scottish plumbers and their hours was freely negotiated between the trade unions and the employers, and does he think it wise to use the National Incomes Commission in respect of matters which have been adjusted in a forward-looking manner between the employers and the trade unions?
§ Mr. Boyd-CarpenterIf the hon. Gentleman studies the Report, he will see that it was well worth obtaining. I share his regret that the trade unions did not exercise their right to put their case to the Commission.
§ Mr. HamiltonCan the right hon. Gentleman say why the Chancellor of the Exchequer referred this matter to the National Incomes Commission in the first instance? Can he tell the House why he expects that workers whose highest average earnings, according to Appendix F of the Report, amount to £15 8s. a week would accept any definition of the national interest from a Commission whose chairman is getting £240 a week for doing the job?
§ Mr. Boyd-CarpenterThis case was referred because, clearly, it comes within the class of case contemplated in the White Paper of November, 1962, as approved by Parliament. I think that the 613 Report indicates very clearly the value of that reference in the light of the very helpful recommendations obtained. I do not think that the hon. Gentleman's reference to the salary of the distinguished chairman is helpful or relevant.
§ Mr. CallaghanDoes not the Chief Secretary realise that this is a very expensive way of getting an essay on wages and hours which has been made available in other forms by a number of other bodies on previous occasions? As he has now answered by hon. Friend's question about what action he proposes to take, may I ask the right hon. Gentleman whether he will advise the Chancellor of the Exchequer that the sooner he abolishes this Commission—if he really wants to get an incomes policy working —the more likely he is to achieve that?
§ Mr. Boyd-CarpenterOne must remember the immense importance which, as I know the hon. Gentleman will agree, attaches to the proper development of an incomes policy in this country. I think that upon reflection the hon. Gentleman will agree that a contribution of this kind was well worth obtaining.
§ Mr. CallaghanIs the right hon. Gentleman aware that in my view this Commission makes absolutely no contribution at all to the securing of a national incomes policy, that it is nothing but an irritant and that the Chancellor would be well advised to abolish it?
§ Mr. Boyd-CarpenterI note the hon. Gentleman's view. But I am bound to say that I think that in this, as in so many other respects, he is in a conspicuous minority.
§ 7. Mr. Manuelasked the Chancellor of the Exchequer the nature of the representations he has received from the building trade operatives in Scotland following the publication of the National Incomes Commission Report, Command Paper No. 1994; and what was the nature of his reply.
§ Mr. Boyd-CarpenterNo such representations have been received. The question of a reply does not therefore arise.
§ Mr. ManuelIs the right hon. Gentleman aware that representations will be coming forward? Is he aware that the 614 decision of the Chancellor of the Exchequer to refer this matter to the National Incomes Commission has roused deep resentment in the Scottish building industry, and that there is no doubt about that? Is he further aware that the accident rate in this industry is greater than in any other? Did the Chancellor give sufficient consideration to this before making the reference, and would not the right hon. Gentleman agree that there are many activities in this country which the Commission might explore before coming to the question of workers' wages and hours which have been freely arrived at after negotiation?
§ Mr. Boyd-CarpenterIf representations are coming forward in the future, they will be answered in the future. I cannot anticipate them. I do not believe that the interests or feelings of anybody could, or should, be hurt by an impartial analysis of the facts.
§ 12. Mr. Gourlayasked the Chancellor of the Exchequer if he will publish in the OFFICIAL REPORT the two tables on profits in the construction industry supplied by Her Majesty's Government to the National incomes Commission and referred to in paragraph 161 of the Commission's Report.
§ Mr. GourlayWhat steps does the Economic Secretary propose to take to enforce the 3½ per cent. limit on profits when he restricts increases in workers' wages to 3½per cent. per annum?
§ Mr. du CannThere is another Question on that subject to which we shall come in a few moments. If the hon. Member will be patient, he will get the answer then.
§ Following is the information:
§ Note on Table N.
INCOME OF PUBLIC QUOTED COMPANIESThe Board of Trade compiles, on a standardised basis, aggregated accounts of public companies whose shares are quoted on a United Kingdom stock exchange and which are mainly engaged in manufacturing, construction, distribution and certain other services in the United Kingdom. Table N, derived from the statistics, shows for the years 1954 to 1961, gross income as a percentage 615 of gross assets of companies in the construction industries, with comparative figures for all companies included in the analysis. The percentage return on capital employed varies very widely from company to company, and even between industries there is considerable variation, as the table shows.
§ Over the years 1954 to 1960 the number of companies whose accounts were analysed and which were classified to construction varied between 67 in 1959 and 55 in 1954. The 1961 figures relate only to companies with assets
| TABLE N | ||||||||
| PUBLIC QUOTED COMPANIES | ||||||||
| Company income as percentage of Assets, 1954–1961 | ||||||||
| Construction | ||||||||
| Dividend and Interest Payments(c) | ||||||||
| Year | Gross Assets (a)£ | Gross Income(b)£ | Income as percentage of Assets | £ | As percentage of Assets | All quoted Companies Income as percentage of Assets | Highest percentage return on Assets (industry in brackets) | Lowest percentage return on Assets (industry in brackets) |
| (excluding Construction | ||||||||
| 1954 | 98,662 | 23,628 | 23.9 | 4,415 | 4.5 | 18.1 | 22.6 (Electrical Engineering and Goods) | 14.3 (Tobacco) |
| 1955 | 112,379 | 24,526 | 21.8 | 4,760 | 4.2 | 17.9 | 21.7 (Electrical Engineering and Goods) | 13.6 (Tobacco) |
| 1956 | 127,482 | 27,643 | 21.7 | 5,137 | 4.0 | 16.9 | 21.0 (Metal Goods) | 14.3 (Tobacco) |
| 1957 | 143,131 | 30,024 | 21.0 | 5,922 | 4.1 | 16.1 | 20.5 (Metal Goods) | 13.1(Textiles) |
| 1958 | 159,780 | 31,603 | 19.8 | 6,509 | 4.1 | 15.2 | 18.3 (Metal Goods) | 9.7 (Textiles) |
| 1959 | 177,034 | 31,950 | 18.0 | 7,167 | 4.0 | 15.9 | 19.1 (Vehicles) | 13.1 (Textiles) |
| 1960 | 193,765 | 31,273 | 16.1 | 7,659 | 4.0 | 16.0 | 19.4 (Retail Distribution) | 13.3 (Textiles) |
| 1960(d) | 168,910 | 28,401 | 16.8 | 6,693 | 4.0 | 16.0 | 19.6 (Retail Distribution | 10.1 (Leather, leather goods and fur) |
| 1961(e) | 185,296 | 30,029 | 16.2 | 7,220 | 3.9 | 14.2 | 19.2 (Miscellaneous Services) | 8.5 (Ship-building and Marine Engineering) |
| NOTES | ||||||||
| (a) Gross assets are fixed assets before deduction of depreciation, plus total current assets, less total current liabilities and provisions, except provisions for future tax. Changes in value of fixed assets arising from re-valuations have been eliminated as far as possible | ||||||||
| (b) Gross income is trading profits (after deducting directors' fees and emoluments, pensions to past directors, superannuation payments, compensation for loss of office, auditors' fees etc.) and other income (from investments and other sources) before allowing for depreciation and other provisions, plus prior year adjustments, other than tax. | ||||||||
| (c) Income tax deducted by companies from payments of dividends is treated as falling not on the companies but on the recipients of dividends. Hence dividends are gross before deduction of tax. | ||||||||
| (d) Figures for 1954–1960 relate to all quoted companies; those for 1960–61 relate only to companies with net assets of £0.5 million or more. | ||||||||
| (e) 1962 figures will be available at the end of February, 1963. |
§ 1962 figures will be available at the end of February, 1963.
§ Notes on the method of compiling the figures and on their limitations appear in Economic Trends in April, 1962, the Board of Trade Journal, 7th December, 1962, and the Ministry of Labour's Statistics on Incomes, Prices, Employment and Production. 617
| TABLE P | ||||||||
| PROFITS AS PERCENTAGES OF TURNOVER (a) | ||||||||
| Great Britain | ||||||||
| Percentages | ||||||||
| 1956–57 | 1957–58 | 1958–59 | 1959–60 (b) | |||||
| Industry | Gross | Net | Gross | Net | Gross | Net | Gross | Net |
| Building and Contracting | 7.0 | 5.6 | 6.8 | 5.0 | 7.1 | 5.1 | 6.4 | 4.4 |
| Treatment of non-metalli-ferous mining products other than coal (including most building materials) | 13.9 | 10.7 | 12.9 | 9.4 | 12.9 | 9.1 | 14.5 | 10.4 |
| Mining and Quarrying other than coal | 19.4 | 13.7 | 18.6 | 12.6 | 18.7 | 12.0 | 20.5 | 13.2 |
| Chemicals | 10.7 | 7.7 | 11.3 | 8.2 | 13.2 | 8. | 14.6 | 10.1 |
| Iron and Steel | 12.1 | 7.7 | 11.5 | 8.2 | 11.6 | 8.2 | 11.5 | 7.1 |
| Shipbuilding | 9.1 | 7.8 | 9.5 | 8.1 | 8.4 | 6.6 | 9.5 | 6.9 |
| Electrical Engineering | 11.7 | 9.5 | 12.3 | 9.6 | 11.2 | 8.2 | 12.6 | 9.5 |
| NOTES: | ||||||||
| Gross Trading Profit less capital allowances equals net trading profit. | ||||||||
| (a) Extraction from Report of Board of Inland Revenue. | ||||||||
| (b) Confidential until end January—then published. |