§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer if he will give his assessment of(a) the rate of return on capital employed in manufacturing and non-manufacturing in 1993 and 1994 and (b) the connection between rate of return and investment in increased manufacturing capacity.
§ Mr. NelsonThe net real rate of return on capital employed by manufacturing companies in 1993 was 5.8 per cent. For all industrial and commercial companies—ICCs—it was 8.4 per cent. Data for 1994 are not yet available, but the forecast published last November in the "Financial Statement and Budget Report" showed the net real rate of return for all ICCs rising to 10 per cent. in 1994, with some further increase in 1995. Increases in rates of return contribute to an improved climate for investment. Evidence of this is beginning to emerge. For example, manufacturing investment in plant and machinery in the fourth quarter of 1994 was 5½ per cent. up on the previous quarter and 7¾ per cent. up on a year earlier.