HC Deb 05 July 1963 vol 680 cc90-7W
Sir J. Eden

asked the Chancellor of the Exchequer whether he will bring up to date the tables appearing in Command Paper No. 1337 of April, 1961, entitled, The Financial and Economic Obligations of Nationalised Industries.

Mr. Barber

Yes. The tables are as follows:

TABLE I
BALANCES ON REVENUE ACCOUNT AND GENERAL RESERVES OF THE NATIONALISED INDUSTRIES
— Yearly Results £ million Unallocated Reserves and Revenue Balances carried forward at the end of 1961
1954 1955 1956 1957 1958 1959 1960 1961 £ million as a percentage of capital employed at the end of 1961
National Coal Board … … … — 3.5 — 19.6 12.8 — 5.3 — 3.5 — 24.0 — 21.3 — 15.0 — 88.3 —
Gas Council and Boards … … … 1.9 0.8 3.8 2.8 — 1.5 — 2.4 2.0 3.3 27.5 4.5%
Electricity Authorities and Boards (England and Wales) … … … 18.8 12.2 11.7 16.1 27.3 26.7 16.3 26.9 167.3 7.4%
Electricity Board (South of Scotland) … 0.6 1.2 0.5 0.27 0.1 0.4 0.4 3.0 1.7%
Electricity Board (North of Scotland) … 0.3 — 0.8 — 0.2 — — 0.1 — 0.03 0.2 1.7 1.2 0.6%
British Transport Commission … … — 11.9 — 30.6 — 54.4 — 63.5 — 89.0 — 73.8 —100.9 —122.0 —573.4 —
British European Airways … … … 1.06 0.61 0.06 1.08 0.23 2.1 1.5 — 1.5 — 0.1 —
British Overseas Airways Corporation … — 0.03 0.85 0.59 — 3.19 — 11.36 — 0.29 — 1.6 — 49.7 — 64.6 —
Post Office … … … … … up to 1955–56 Exchequer received any surplus — 3.1 2.6 8.7 20.9 24.3 13.1 42.1 4.1%
TABLE II
GROSS INCOME (BEFORE DEPRECIATION) AS A PROPORTION OF NET ASSETS (AFTER DEPRECIATION)
Percentages
1956 1957 1958 1959 1960 1961
Manufacturing and distribution … … 19.9 19.2 18.2 19.4 19.9 17.8
Iron and steel (55 companies) … … 20.5 20.2 17.9 17.4 19.2 14.2
National Coal Board … … … … 14.1 10.9 9.8 8.3 9.4 10.7
Gas Council and Boards … … … 8.7 8.8 7.8 7.9 8.9 9.2
Electricity Council and Boards … … 9.3 9.6 10.6 10.7 10.2 10.7
South of Scotland Electricity Board … 11.4 10.1 9.2 9.5 9.7 10.2
North of Scotland Hydro-Electric Board … 4.8 4.9 5.1 5.4 5.8 6.7
British Transport Commission … … 2.7 2.4 1.0 2.3 1.4 0.6
British European Airways … … … 14.7 17.4 13.3 16.7 14.9 10.5
British Overseas Airways Corporation … 11.9 6.7 6.4 12.7 14.4 6.2
Post Office … … … … … 11.6 12.2 12.6 13.2 13.0 11.0
TABLE III
NET INCOME (AFTER DEPRECIATION) AS A PROPORTION OF NET ASSETS (AFTER DEPRECIATION)
percentages
1956 1957 1958 1959 1960 1961
Manufacturing and distribution … … 16.2 15.4 14.3 15.4 15.8 13.6
Iron and steel (55 companies) … … 16.7 16.3 14.1 13.3 14.9 10.2
National Coal Board … … … … 6.8 3.6 2.8 1.6 2.3 3.2
Gas Council and Boards … … … 4.4 4.5 3.4 3.3 4.2 4.5
Electricity Council and Boards … … 4.7 5.0 5.7 5.6 5.1 5.6
South of Scotland Electricity Board … 5.7 4.4 4.2 4.4 4.4 5.2
North of Scotland Hydro-Electric Board … 3.2 3.3 3.5 3.9 4.3 5.2
British Transport Commission … … 0.2 -0.6 -2.1 -1.3 -2.4 -3.2
British European Airways … … … 4.1 7.8 4.7 8.6 6.7 0.8
British Overseas Airways Corporation … 3.4 -0.2 -0.7 3.9 3.6 -12.2
Post Office … … … … … 6.9 7.5 8.0 8.6 8.5 6.5
TABLE IV
SAVING AND INVESTMENT
£ million
Calendar Years
1956 1957 1958 1959 1960 1961
Saving
Personal … … … 916 917 784 994 1,564 2,046
Companies … … … 1,941 1,981 1,930 2,144 2,457 2,103
Central Government … 329 489 536 421 136 263
Local Authorities … … 130 161 165 196 224 197
British Transport Commission* - 8 - 18 - 47 - 35 - 62 - 86
Coal, Gas, Electricity … 187 164 183 192 206 245
Airways Corporations … 10 8 7 15 20 8
Post Office … … … 41 50 59 74 82 74
Other public corporations … 17 15 16 15 33 16
3,563 3,767 3,633 4,016 4,660 4,866
£ million
Calendar Years
1956 1957 1958 1959 1960 1961
Capital formation
Personal … … … 608 604 632 759 897 963
Companies … … … 1,581 1,674 1,455 1,640 2,299 2,190
Central Government … 96 107 148 159 144 191
Local Authorities … … 566 570 535 567 609 675
British Transport Commission 120 158 164 172 201 189
Coal, Gas, Electricity … 395 463 479 525 455 483
Airways Corporations … 26 41 39 27 46 39
Post Office … … … 101 102 89 84 97 120
Other public corporations … 77 65 45 43 81 112
3,570 3,784 3,586 3,976 4,829 4,962
Excess of Saving over Capital formation
Personal … … … 308 313 152 235 667 1,083
Companies … … … 360 307 475 504 158 - 87
Central Government … 233 382 388 262 - 8 72
Local Authorities … … - 436 - 409 - 370 - 371 - 385 - 478
British Transport Commission* - 128 - 176 - 211 - 207 - 263 - 275
Coal, Gas, Electricity … - 208 - 299 - 296 - 333 - 249 - 238
Airways Corporations … - 16 - 33 - 32 - 12 - 26 - 31
Post Office … … … - 60 - 52 - 30 - 10 - 15 - 46
Other public corporations … - 60 - 50 - 29 - 28 - 48 - 96
- 7 - 17 47 40 - 169 - 96
* Saving excludes the British Transport Commission's subsidy receipts in 1960 and 1961 to maintain comparability of the series.
Notes
TABLE I
The figures of accumulations at the end of 1961 include both balances, whether surplus or deficit, on revenue account at the appropriate date, and such of the reserves of the body concerned as were not allocated to specific contingencies such as liabilities for future taxation or insurance.
TABLES II AND III
Definitions
Gross income covers trading profits or trading surpluses and other income before deduction of depreciation, provisions for capital redemption, tax, interest and dividends.
Net income is equal to gross income minus depreciation. A minus figure indicates a net loss before taking into account interest payable.
Net assets cover total assets (excluding discounts on stock issues and, in the case of the British Transport Commission, the Special Account for revenue deficits) less liabilities of a current nature. The figure used is the average for the beginning and end of the year.
Depreciation covers depreciation as charged in the accounts but excludes supplementary provision. In the case of the British Transport Commission, however, it includes an additional amount based on capital expenditure charged to revenue. Depreciation is charged at historic cost except in the case of a few companies in the private sector which charge it at replacementcost. For the North of Scotland Hydro-Electric Board depreciation is reckoned as equivalent to the instalments paid to local authorities plus contributions to the redemption fund.
Sources
Manufacturing and distribution: data for approximately 3,000 companies for the years up to 1960 have been published in Economic Trends, April 1962, and data for approximately 2,000 companies for 1961 have been published in the Board of Trade Journal, 7th December, 1962.
Iron and steel: data for 55 companies in this industry for the years up to 1959 were published in the London and Cambridge Economic Bulletin (Times Review of Industry) March 1961. Figures for 1959 and 1960 have been estimated on the basis of material published quarterly in"The Economist". As a result of denationalisation, the number of these companies in the private sector increases each year while the number in the public sector diminishes.
All other authorities: the annual accounts of the relevant authority.
Periods
For manufacturing and distribution and for iron and steel, 1956 covers accounts in respect of accounting years ending within the fiscal year 1956–57 and similarly for later years. For the Gas Council and Boards, Electricity (C.E.A./E.C.) and Boards and the two Airways corporations the figures for 1956 relate to the fiscal year ending March 1957. For the remainder accounts relate to calendar years.
Interpretation
In comparing the figures for the various undertakings inside the nationalised sector and with industries in the private sector, there are a number of factors to be taken into account including the following:—
(1) valuation of assets cannot be obtained on a uniform basis. The valuation of fixed assets, investments and stocks, etc. often depends on the date (and the price level) at which they were bought and also on factors such as depreciation and revaluation policies, writing down investments and writing off bad debts according to the attitude to and interpretation of the principles of conservative finance by individual managements;
(2) there is a wide divergence in the nature of the undertakings, in the nature of their assets, including the length of the fructification period for investment, and in the conditions under which they operate; for example most factories benefit from the de-rating acts while electricity power stations and gas works do not;
(3) accounting practices vary but the consequences of this have so far as possible been eliminated; the adjustments made have not been found to affect the results significantly.
TABLE IV
Savings or finance from internal sources comprises undistributed income (before allowing for depreciation or stock appreciation), additions to interest and tax reserves and capital transfers.