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Manufacturing Investment

Volume 890: debated on Monday 21 April 1975

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asked the Secretary of State for Industry what estimate he has made of the level of investment in manufacturing industry over the next year.

The intentions inquiry carried out by my Department in November/December 1974 indicated that the volume of investment in manufacturing industry in 1975 would be 7 per cent. to 10 per cent. lower than the level then expected for 1974.

Will the Secretary of State tell us whether it is the Government's opinion that the level of investment in manufacturing industry is likely to he enhanced if we remain a member of the Common Market rather than if we leave? If he has difficulty in answering that question, to whom should I address it?

The hon. Gentleman knows that the investment performance of this country has not improved in the last two years and three months. He must also know that our failure to invest on a scale comparable with that achieved by our competitors over 10 years or more is the basis of many of the problems facing Britain, including our current inflation and unemployment levels. The hon. Gentleman should therefore welcome the Government's proposals, through the NEB and planning agreements, to get investment up by direct methods, which is what we intend to do.

When does my right hon. Friend expect to announce the level of investment in British Leyland? If something is not done soon, from what I am told by people at plants in the Midlands, the company and its morale are sinking so fast that we shall have nothing to invest in.

I am aware of that situation. There is another Question on that matter today. Without anticipating that Question, I am hoping to make a statement to the House on that subject as soon as possible.

Will the Secretary of State now answer the question put to him by my hon. Friend the Member for St. Marylebone (Mr. Baker)? Will he at the same time explain why the Chancellor of the Exchequer last week gave figures for investment which had been revised since the last Budget, but which he apparently has not revised since last November? Are the right hon. Gentleman and his Department now able only to provide information about investment intentions taken in a survey dated last November? Is that the latest information that he has? If he has later information, why not make it available to the House when requested to do so by my hon. Friend?

I shall do my best to answer the hon. Gentleman's question. The figures which I gave were for November-December. The next figures are due, I understand, on 9th June, and on 13th May the CBI figures will be available. I have given the House the latest information available to me. However, the hon. Gentleman will be encouraged to know that the rather gloomy forecasts of investment which were made last year were less serious than the outturn, as it transpired.

Must not the level of investment, in the end, always depend on the return which the person who lends the money is likely to receive? Have the Government any plans, either by taxation reduction or at least by removing dividend restraint, to increase that return? If that return is not increased, it will incite people to buy Krugerrands or to put their money into port wine or antiques, instead of industry, where they should get a return.

Lord Barber's experience in attempting to follow the hon. Gentleman's advice was so unsatisfactory that we do not intend to repeat it.