§ Mr. Nicholas Edwardsasked the Secretary of State for Industry if he will publish a table in the OFFICIAL REPORT showing how much asset growth in manufacturing industry in this country was financed from external sources and how much from internal sources from 1950 to the latest available date.
§ Mr. MeacherThe information available relates to large quoted companies in manufacturing and is given in the following table. The figures show the relative importance of external and internal sources of funds in financing the increase in assets arising from total expenditure on fixed assets, the acquisition of subsidiaries, etc., and increases in current assets and in investments, as shown in theBusiness Monitor, M3. External sources are taken as the proceeds of issues of share and loan capital—including those issues in exchange for subsidiaries-investment grants and other capital receipts and increases in creditors and in bank and other short-term borrowing. 311W Internal sources are taken as gross income—including depreciation—less interest, tax and dividend payments. The relative importance of external and internal sources is to some extent arbitrary and depends upon the extent to which receipts are netted off expenditure and on the coverage of expenditure.
SOURCES OF FUNDS FOR EXPENDITURE ON ASSETS Large quoted manufacturing companies* Percentage of total External sources Internal sources 1950 … … 33 67 1951 … … 39 61 1952 … … 21 79 1953 … … 21 79 1954 … … 30 70 1955 … … 39 61 1956 … … 37 63 1957 … … 43 57 1958 … … 25 75 1959 … … 33 67 1960 … … 41 59 1961 … … 48 52 1962 … … 45 55 1963 … … 37 63 1964 … … 43 57 1965 … … 48 52 1966 … … 47 53 1967† … … 60 40 1968† … … 63 37 1969† … … 63 37 1970† … … 65 35 1971† … … 35 65 1972† … … 41‡ 59‡ * Based on Department of Industry analysis of the accounts of large quoted manufacturing companies operating mainly in the United Kingdom: the population of companies covered by this analysis was revised in 1960,1964 and 1969. †Investment grants are included in external sources from 1967 onwards and affect the percentages from that year. They correspond to certain capital allowances which reduce tax payments and so increase internal sources of funds. ‡Based on provisional results for 1972 derived from accounts analysed up to 30th September 1973.