§ Mr. Austin Mitchellasked the Secretary of State for Trade and Industry what was the proportion of borrowing financed by bank advances in the case of (a) all companies and (b) manufacturing in each of the years from 1977 to date.
§ Mr. FletcherThe information available from the Department's analysis of the published annual accounts of a representative sample of Great Britain industrial and commercial company groups and independent companies is given in the following table. The figures include borrowing by both Great Britain companies and their United Kingdom and overseas subsidiaries as the analysis is based on the consolidated accounts of company groups. These cover the Great Britain parent company and all its United Kingdom and overseas subsidiaries. An alternative series for industrial and commercial companies, but not manufacturing, is available from the national accounts and published in "Financial Statistics" table 8.3.
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Increase in bank loans and overdrafts as a percentage of increase in total borrowing* Industrial and commercial companies Manufacturing companies All companies† 1977║ 81 68 1978 56 66 1979 115 98 1980 54 73 1981 60 37 1982• 69 83 Large companies‡ 1981 58 37 1982• 60 78 1983•¶ —161 —159 table. The figures are derived from a projection from the 1982–83 survey of personal income (the latest available), on the basis of current interest rates. The table does not include the relief given to former option mortgagors who are now included in the arrangements for giving mortgage interest relief at source. I regret that it is not possible to provide reliable estimates for this group in detail. Nor is it possible to provide reliable separate estimates for the small number of elderly taxpayers with mortgages.
* Borrowing is defined as bank loans and overdrafts, short-term loans, debentures, mortgages and long-term loans, and is measured net of repayments and redemptions.
† Figures are grossed-up from a sample to cover all limited company groups and independent companies registered in Great Britain other than banking, insurance and financial companies. Full details are given in Business Monitor, MA3, Company Finance.
‡ "Large" defined as company groups or independent companies with capital employed of over £4.16 million.
║ Estimates for a particular year relate to companies' accounting years ending between 1 April of the year shown and 31 March of the following year.
¶ Negative sign for 1983 indicates increase in bank borrowing because total borrowing from all sources by large companies in 1983 was negative, with repayments exceeding new borrowings. Provisional estimates show net repayments of £2.5 billion for all companies and £1 billion for manufacturing companies with/increases of £4 billion and £1.5 billion respectively in bank borrowing.
• Provisional.
SourceBusiness Monitor, MA3, Company Finance, 12–16th issues.