§ Mr. Nicholas Winterton
asked the Chancellor of the Exchequer what was the net return on capital for the private sector in 1975; and how this compares with the public sector.
§ Mr. Denzil Davies
There exist a number of different measures of the rate of return on capitals. One such measure is gross trading profits plus rent less capital consumption at current replacement cost less stock appreciation, expressed as a percentage of average beginning and end-year net capital stock at current replacement cost plus the book value of stocks and work-in-progress. Preliminary estimates for 1975 indicate that on this basis the rate of return for industrial and commercial companies was about 3 per cent., and for public corporations around zero.1 See "Estimating companies' rate of return on capital employed" in Economic Trends, 556W November 1974 and the subsequent article in "Trade and Industry" for 24th October 1975.