§ Mr. Deakinsasked the Secretary of State for Industry what has been the trend in dividends on shares in manufacturing industry in recent years; and if there is any significant correlation between this trend and changes in profitability over the same period.
§ Mr. ButcherNo recent figures for manufacturing companies alone are available. Column (1) of the following table shows actual dividend payments by all industrial and commercial companies from 1974 to 1981 and column (2) the figures deflated by the retail price index. Column (3) gives the rate of return on capital. Dividend controls were in operation until the end of July 97W 1979. Nevertheless, there appears to be some correlation between columns (2) and (3) although the relationships in 1977 and 1978 are out of line with those of other years.
Dividend payments and profitability of all industrial and commercial companies Dividend payments £ million Profitability percent. Actual At 1975 Prices Net real rate of return on capital employed (1) (2) (3) 1974 1,469 1,825 5.9 1975 1,508 1,508 4.6 1976 1,795 1,541 4.8 1977 2,144 1,588 7.6 1978 2,619 1,791 8.2 1979 4,204 2,536 6.9 1980 4,208 2,151 6.2 1981 4,467 2,041 6.2
£ million 1979–80 1980–81 1981–82 Notes British Steel Corporation Subscription of Capital— 905 1,233 806 During 1981 the first stage of BSC's capital reconstruction occurred. This extinguished £3,000 million of capital and £509 million of NLF. The interest saving in 1981–82 was about £59 million of which to repay NLF 209 50 — to repay foreign borrowings 244 155 76 British Telecom NIL NIL NIL Rolls Royce Equity* †31 94 130 Launch aid figures do not take account of appropriations in aid—Her Majesty's Government are entitled to a levy on sales of RB211 engines. Launch Aid RB211 Aeroengine 79 67 93 Research and Development Support 8 8 10 NEB The figures for the British Technology group are the same as those for the NEB since entries for the NRDC, the other operating arm of the BTG, are zero in all categories in all three years. Capital debt written off NIL 32.4 NIL Interest foregone NIL NIL NIL The figures do not include those for Rolls-Royce or BL which are provided for separately, though RR was an NEB subsidiary until 12 August 1980, and BL until 31 March 1981 PDC advanced 66 53.7 42 BL Equity* †150 †300 520 Ownership of NEB holding in BL transferred to Secretary of State 31 March 1981. National Giro PD Capital NIL NIL 5 Measures to offset the effects of the levy on banks non-interest bearing deposits to enable National Girobank's investment programme to proceed, including waiving PDC dividend. British Shipbuilders PD Capital 181 110 107 Subsidies under sections 7 and 8 of 31.2 39.9 45.9 Industry Act 1972 Shipbuilding Redundancy Payments 15.5 20.1 14.4 Construction Grants 0.1 0.1 0.3 Notes
*Government funding provided through the purchase of equity by the Secretary of State under section 3 of the Industry Act 1980.
Figures for other forms of public finance, such as regional grants or selective financial assistance are not available as this would incur a disproportionate cost.
†Purchase of equity by NEB. Rolls-Royce was an NEB subsidiary until 12 August 1980 and BL until 31 March 1981.