HC Deb 09 April 1981 vol 2 cc311-2W
Mr. Eggar

asked the Chancellor of the Exchequer (1) if he will give figures for the profits earned by the four major clearing banks, before and after tax, for each of the years 1973 to 1980 (a) on a historic cost basis, (b) on a current cost basis and (c) on a current cost basis in terms of 1973 prices;

(2) if he will publish a table bringing up to date table 12 on page 24 of the report of the Price Commission on "Banks: Charges for Money Transmission Services", showing the return on capital adjusted for inflation for the four major London clearing banks;

(3) if, in relation to the profits earned by the four major clearing banks in 1980, he will give approximate estimates for (a) the proportion of these profits earned in the domestic market, (b) the amount of profit earned in the domestic market expressed on a current cost basis and (c) the revenue from the proposed bank levy, as applicable to the four major clearing banks, expressed as a percentage of (b);

(4) what he estimates the rate of return earned by the four major London clearing banks on their capital was, expressed as an average for the years 1974 to 1980, both on a historic and current cost basis; and how these figures compared with industry generally;

(5) if he will give figures for the amount of money raised from their shareholders by the clearing banks in the years 1974 to 1980; and what proportion of this money will be represented by their payments of the levy proposed in the Budget.

Mr. Lawson

Some of the information requested by my hon. Friend is not available. The only source of the information that is available is the published accounts of the big four clearing banks. Relevant figures taken from these accounts are set out in the following table. These show the pre- and post-tax profits of the big four London clearing bank groups for the period 1973 to 1980. Figures for current cost profits for a similar period have not been published. I emphasise that these figures refer to the whole operation of the clearing bank groups, not just their United Kingdom banking business, that these figures are stated after provision for bad and doubtful debts and that for a variety of reasons, such as the inclusion of deferred tax, the tax figures in published accounts may not indicate the tax actually payable on the year's profits.

Historical cost profits as published in bank accounts of big four clearing bank groups
Pre-Tax £ million Post-Tax
1973 580 326
1974 449 205
1975 424 187
1976 700 332
1977 *896 *550
1978 †1,084 †698
1979 1,563 1,072
1980 1,455 1,061

* Restated for change in accounting policy re deferred tax, bad debts, depreciation and investment income.

† Restated for changes in accounting policy re income from leased assets.