HC Deb 04 May 1967 vol 746 cc724-5
31 and 32. Mr. Ian Lloyd

asked the First Secretary of State and Secretary of State for Economic Affairs (1) whether he will issue, for the general guidance of those responsible for decisions affecting pricing, reinvestment and distribution policies in the private sector, a precise definiton of the term "reasonable profit" and indicate whether the basis of such a definition is to be capital employed in the business in the economic sense of that term or some other concept;

(2) whether he will issue, for the general guidance of those responsible for decisions affecting pricing, reinvestment and distribution policies in the private sector, a precise definition of the levels of risk for which particular levels of profitability are to be an appropriate return on capital employed.

The Chancellor of the Duchy of Lancaster (Mr. Frederick Lee)

No, Sir. What may be a reasonable profit for a particular industry or enterprise will depend on the particular circumstances of that industry or enterprise, including the degree of risk involved in its operations.

Mr. Lloyd

Will not the right hon. Gentleman agree that the constant use of the word "reasonable" in this context imports an ethical criterion which is wholly inappropriate, suggesting ethical or, at least, legislative solutions where only economic ones are possible?

Mr. Lee

We have to look at each particular case, looking at the question of efficiency and determining in the light of our examination whether it is a proper return or not.

Dr. David Kerr

Would not the hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd) be assisted out of his intellectual log if we were to take into community ownership a much larger section of the economy, thus ensuring that profits came to the community instead of to individuals?

Mr. Lee

There is a good deal of logic in what my hon. Friend says.