§ Mr. Giles Shawasked the Secretary of State for Industry whether there is any evidence that the practice of leasing is 553W distorting the statistics for capital expenditure by the manufacturing sector; and whether he will publish estimates of capital expenditure broken down by end user rather than purchaser for as long a period as practicable.
Mr. Alan WilliamsThe basis for the classification of capital expenditure by the manufacturing, distributive and service industries is by ownership of the assets and not by final use. Expenditure on capital goods acquired by leasing firms is, therefore, not classified to manufacturing industries but to insurance, banking, finance and business services-included within the broader category of distributive and service trades—because much of the leasing is carried out by business units properly classified to finance—see National Income and Expenditure, 1967–1977, page 137.
Since 1975 information has been obtained by a statistical inquiry on assets acquired by leasing firms for use by manufacturers on finance—that is full payout—leases. Results for the years 1975–1977 were published in Trade and Industry on 29 September 1973. Steps are being taken to improve the coverage of these statistics but this can only be done to the extent that the increase in the burden of form-filling on the firms involved proves acceptable.
Figures for manufacturing industries' investment in fixed assets on both the sector of ownership basis and on the sector of use basis, that is including provisional estimates for the element of leasing from the service industries are as follows:
MANUFACTURING INDUSTRIES' INVESTMENT IN FIXED ASSETS £ million at 1975 prices Capital expenditure by manufacturers Capital expenditure by manufacturers plus assets acquired on financial leases from the service industries 1975 3,522 3,710 1976 3,345 3,540 1977 3,573 3,850 1978* 3,833 4,200 * Provisional. Further estimates will become available when National Income and Expenditure 1968–1978 is published in September this year. The estimated outturn for 554W 1978, when leasing is taken into account, was probably much the same as in 1970, the all-time peak year for manufacturing investment. The available evidence suggests that the leasing of assets for use by manufacturing industry was only a very small activity in 1970.