§ Mr. Meacherasked the Chancellor of the Exchequer what evidence he has regarding what proportions of distributed profits are, respectively, reinvested in domestic industry, invested abroad, or put to other uses; and how this compares with the position 10 and 20 years ago.
§ Mr. NottNo evidence is available as to how distributed profits are used. It is imposible to measure the uses to which distributed profits are put by the recipients.
§ Mr. Meacherasked the Chancellor of the Exchequer what information he has, for each year since 1960, regarding what proportion of total annual net profits or operating surplus has been, respectively, ploughed back into domestic investment, invested abroad, or put to other uses; and what information he has regarding the comparable use of net profits during this period in the United States, EEC and Japan.
§ Mr. NottProfits represent only one source of company funds and it is impossible to associate them with particular uses of those funds. The following table sets out in simplified form the sources and uses of funds of United Kingdom industrial and commercial companies; consistent figures are only available from 1963 onwards. Further detail can be found in "Financial Statistics". Simplified tables of capital operations and financial transactions for OECD countries are published annually in "OECD Financial Statistics"; these tables contain different approaches to definition and estimation, partly reflecting particular national economic structures, and cannot be summarised in a comparable form.
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INDUSTRIAL AND COMMERCIAL COMPANIES SOURCES OF FUNDS £million Undistributed income Borrowing Capital transfers Total 1963 … … … … 2,575 1,223 14 3,812 1964 … … … … 3,029 1,529 17 4,575 1965 … … … … 3,057 1,473 20 4,550 1966 … … … … 2,870 1,160 26 4,056 1967 … … … … 2,684 1,134 236 4,054 1968 … … … … 3,277 1,741 454 5,472 1969 … … … … 3,208 1,972 598 5,778 1970 … … … … 3,039 2,350 526 5,915 1971 … … … … 3,393 2,329 595 6,317 19/2 … … … … 4.426 4,595 407 9,428
USES OF FUNDS Capital formation Financial assets Net investment abroad Other* Total 1963 … … … … 2,163 741 332 576 3,812 1964 … … … … 3,172 604 391 408 4,575 1965 … … … … 3,117 572 450 411 4,550 1966 … … … … 2,977 449 427 203 4,056 1967 … … … … 2,682 757 445 170 4,054 1968 … … … … 3,338 675 647 812 5,472 1969 … … … … 3,902 557 769 550 5,778 1970 … … … … 4,446 393 639 437 5,915 1971 … … … … 4,036 1,507 433 341 6,317 1972 … … … … 4,207 3,153 755 1,313 9,428 * Includes unidentified financial transactions.
§ Mr. Meacherasked the Chancellor of the Exchequer what were the total net profits in manufacturing industry in Great Britain in 1960, and what have been the total for each successive year at constant 1960 prices and what percentage for each year has been ploughed back for reinvestment; what were the equivalent profit levels in sterling, at the appropriate sterling exchange rate each year, in France, West Germany, Italy, United States, Japan and Sweden during each of these years at constant 1960 prices; and what percentage each year was reinvested.
§ Mr. NottFigures of profits at constant prices are not available. The retained profits—plus other capital receipts—of manufacturing companies operating mainly within the United Kingdom as a percentage of the total of net profits and other income are tabulated below. Other capital receipts—largely investment grants—have been added to retained profits, which are after provision for tax, to achieve comparability between years of the ratios of retained profits to total net income. These figures are based on the Department of Trade and Industry's analysis of the accounts of large industrial and commercial quoted companies—operating mainly in the United Kingdom; detailed figures are
270Wpublished annually in the Business Monitor series (M3 Company Finance). No comparable international figures are available for manufacturing.
RETAINED PROFITS AS A PERCENTAGE OF TOTAL INCOME NET OF PROVISIONS FOR DEPRECIATION (Large Quoted Companies: Manufacturing) Total of Net Profits and Other Income Retained Profits and Other Capital Receipts Retained Profits as a percentage of Net Profits Other Income £ million £ million 1960 1,673 531 32 1961 1,544 439 28 1962 1,479 384 26 1963 1,679 457 27 1964 1,955 539 28 1965 1,990 731 37 1966 1,850 346 19 1967 1,872 544 29 1968 2,242 641 29 1969 2,139 575 27 1970 2,051 587 29 1971 2,371 660 29 Note: The coverage of the figures was revised in 1964 and again in 1969.