Price Commission figures for the period November 1975 are not yet published. The Commission's latest report says that profit margins of Category 1 manufacturing firms in the third quarter of 1975 were 46·2 per cent. of reference levels, compared with 52·4 per cent. in the third quarter of 1974. For distributors the figures were 45·7 per cent. and 58–8 per cent. The decline in profit margins in 1975 were mainly due to the recession.
I accept that the very serious decline in profitability and in the rate of return on capital is by no means all due to the Price Code. However, will the right hon. Lady bear in mind that, as and when industry sees the prospect of an economic upturn, fear of a long-term continuation of the Price Code will have a depressing effect on its investment intentions and therefore on expansion? Will she therefore take steps to make clear as soon as possible her long-term intentions towards the continuation of the Price Code?
I recognise that there are problems for industry in looking to long-term return on investment, but the hon. Gentleman may have noticed that in recent discussions in which I took part it was made clear to industry that we would consider very seriously what might be done for investment. I repeat that not all profits invariably go into domestic investment.
Does the right hon. Lady accept that profit in United Kingdom manufacturing industry is only a fraction of what it was 20 years ago and that in some areas price controls will have to be lifted if increased investment in private industry within this country is to be achieved?
The point I was trying to make was that it was very important that, where profits go into investment, in our present circumstances that investment should be at home and preferably in manufacturing. I am sure that the House will agree with that. What needs to be done in respect of the Price Code is to reflect that very considerable priority for the country as a whole.