§ Mr. Gouldasked the Chancellor of the Exchequer whether he is satisfied that relative wholesale prices for manufactures have risen by 15 per cent. in the year ended the fourth quarter of 1977 compared with an increase of only 7 per cent. in relative normal unit labour costs; and, if so, why there has not been a commensurate increase in profit margins.
§ Mr. Robert SheldonA comparison of the change in relative wholesale prices with the change in relative normal unit labour costs gives some indication of how profit margins in the United Kingdom have moved relative to those in other countries; it does not in itself give a measure of how profit margins in the United Kingdom have changed. There does seem, however, to have been an increase in United Kingdom profit margins over the period. This is illustrated by the fact that, excluding profits earned in the North Sea, the share of profits in domestic income—both net of stock appreciation—rose from 6.2 per cent. in 1976 to 8.8 per cent. in the third quarter of 1977.