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Industry (Capital Investment)

Volume 87: debated on Wednesday 27 November 1985

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asked the Secretary of State for Trade and Industry what are the latest figures for capital investment in industry; and how these compare with the figures for the past two years.

Total capital investment in United Kingdom industry in 1984 reached more than £26·8 billion, the highest level on record and 10 per cent. above the 1983 level of £24·4 billion. In the first half of 1985, total industrial investment was 6 per cent. above that in the corresponding period in 1984.

Those are encouraging figures for the economy, but does my right hon. and learned Friend agree that in the end both investment and jobs depend on the profits made by industry, so it is important that the profitability of British industry is at its highest since 1973 and that prospects for the coming year are good?

My hon. Friend is absolutely right. No industry will invest if it cannot afford to do so—hence the importance of profitability. Even with profits, however, no industry will invest unless its prospects appear to it to be good. Therefore, the high figure for investment that I have given shows not only ability to invest but confidence in the future on the part of British industry.

Will the Secretary of State come to the real world and to my constituency in the north-east of Manchester to see what was once a vibrant manufacturing industrial base now in complete isolation, with empty factories standing like tombstones of a once proud past? Does he appreciate that that is what Prince Charles was talking about when he said that we were becoming a fourth-rate nation? Prince Charles and the voters of this country should realise that we are becoming a fourth-rate nation because we have a fourth-rate Government. People cannot live on fraudulent claims and promises. When are we to have real investment?

The hon. Gentleman does less than justice to his constituents by ignoring the fact that assisted area status has been given to Manchester and the figures show that that is being used on a very substantial scale. To talk about investment in the real world while ignoring figures showing the highest level of investment on record does not do justice to the hon. Gentleman's constituents. The confidence of British industry will be best served in the interests of the hon. Gentleman's constituents and their employment if he accepts the improving situation instead of trying to ignore it for political reasons.

I welcome the increased investment and congratulate the Government on achieving it, but does my right hon. and learned Friend agree that the figure is still totally inadequate? Does he further agree that industry will invest and plan for the future only if it believes that the Government are entirely behind it in seeking to create additional jobs, and that that will be achieved only if the Government protect British industry from unfair competition? With regard to the clothing and textile industries, will my right hon. and learned Friend give an assurance that the Government will take a more robust attitude in defence of British industry in the current multi-fibre arrangement negotiations?

The answer to my hon. Friend's question is given in the fact that manufacturing investment rose by 14·5 per cent. in the past year. That shows confidence on the part of British industry in the policies being followed by the Government. As for the multi-fibre arrangement, the Government are committed to negotiating a further arrangement on the terms stated by my right hon. Friend the Minister for Trade.

The Secretary of State has cited manufacturing industry as an example of the Government's success. Is he aware that the level of manufacturing investment to which he referred is not merely 21 per cent. below the level in 1979, but lower than the levels for 1978, 1977, 1976, 1975 and 1974, and £1 billion lower, than in 1970, when the then Labour Government went out of office, and also lower than 1969? Does the right hon. and learned Gentleman realise that he has to go back to 1968 to find a comparably low figure under a Labour Government? Is he proud of those 17 wasted years?

I am proud of the fact that capital investment in United Kingdom industry reached more than £26·8 billion in 1984—the highest level on record. I have given figures showing the improvement for manufacturing industry. The right hon. Gentleman is not doing himself, his party or the country any good by concentrating exclusively on manufacturing industry, at the expense of capital investment.