asked the Secretary of State for Industry what the real rate of return on capital after tax was in each year from 1951 to 1978.
I assume that my hon. Friend refers to rates of return on capital employed by industrial and commercial companies. My Department currently prepares such estimates on a pretax basis only. Estimates on a post-tax basis for industrial and commermercial companies excluding North Sea activities were published in the December 1978 Bank of England Quarterly Bulletin, and these are given below. Figures for years before 1960 are not available.
|INDUSTRIAL AND COMMERCIAL COMPANIES (EXCLUDING NORTH SEA ACTIVITIES)|
|Post-Tax Real of Return(a)|
|(a) the backward-looking measure, computed by reference to those tax allowances in force when the capital was installed. The estimates are based on estimated accruals of tax rather than payments, and assume tax allowances can be fully used in the year when they accrue. The assumption has not been realised in recent years, and the rates of return may be biased upwards as present values of tax allowances may be less when they are actually used.|