§ 45. Mr. Cockeram
asked the Secretary of State for Trade and Industry if he will make a statement on company profits and liquidity in 1983.
§ Mr. Kenneth Baker
Industrial and commercial companies' gross trading profits, net of stock appreciation, are estimated to have risen by 23 per cent. between the years 1982 and 1983. This applies whether North sea activities are included or excluded. It probably means that the net real rate of return on capital employed—pre-tax and pre-interest—has increased, including North sea, from 8 per cent. in 1982 to about 10 per cent. in 1983. the highest since the mid-1960s and, excluding North sea, from 4.5 per cent. to about 6 per cent., the highest since 1978.
The liquidity of the large companies in the Department's quarterly survey increased appreciably during 1983 although there was some reduction in the fourth quarter after the sharp rise in the third. It is estimated that this still left it higher than at any other time since the end of 1978.