asked the Minister of Technology whether he is satisfied with the adequacy of official figures about stock accumulation in manufacturing industry, and how the ratio of raw materials, work in progress, and finished stocks, respectively, and in total to production in 1969 compare with previous recent years in this country and what statistics he receives from international sources on comparable information in other countries.
Mr. Alan Williams:
There are considerable statistical difficulties in obtaining precise estimates of stock changes, especially quarterly, but I am satisfied that the official statistics are reasonably adequate and provide a valuable indication of manufacturers' stock accumulation. The stock-production ratios were much lower in 1969 than in recent years, except for finished goods, where the ratio was near the average. International sources do not provide comparable information.
Is it not a fact that manufacturers are having to increase their stocks to maintain continuity of sales and service and that this is resulting in funds being deflected away from investment purposes, simply so that manufacturers may retain the necessary rate of distribution to overcome the credit squeeze?
What examination has my hon. Friend carried out into the way in which we in this country carry a high ratio of stocks compared with ratios carried in other countries?
One of the difficulties in this sphere is that international information of a particularly reliable kind is not available. One factor, for example, is in relation to raw materials. where ratios may be different because we import more of our raw materials than, say, the Americans. We therefore keep a higher stock ratio to ensure greater reliability of supplies.