asked the Secretary of State for Industry whether he will publish a table in the Official Report showing (a) the gross trading profits of companies in 1978, (b) the estimated return on capital in 1978 on a current cost accounting basis and (c) the amount of tax waived in 1978 for depreciation and stock appreciation, respectively.
The estimates are:
a) is an estimate of gross trading profits before deducting either interest payments or stock appreciation.
The figures at ( c)—which are subject to a wide margin of error—are the estimated effects on tax receipts in the financial year 1979–80 which would be derived largerly from profits earned in the calendar year 1978. Financial companies are included but the amounts involved would be small. The two figures are not additive: the combined effect of capital allowances and stock relief is provisionally estimated as £5·5 billion. For an explanation of this effect, see paragraph 21, page 3 of "Inland Revenue Statistics 1979".
The figure at ( b) is calculated as gross trading profit plus rent received, less stock appreciation, less depreciation at current replacement cost as a percentage of the net capital stock of fixed assets other than land at current replacement cost plus the book value of stocks—see the article "Companies' rate of return on capital employed 1960 to 1978", Trade and Industry 28 September 1979. This omits the monetary working capital adjustment of current cost accounting which is unlikely to be significant at the level of aggregation of all industrial and commercial companies.