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Machine Tool Industry

Volume 201: debated on Wednesday 15 January 1992

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To ask the Secretary of State for Trade and Industry what new incentive to manufacturers he intends to introduce to stimulate the home machine tool industry.

The Government can best help industry—including the machine tool industry—by providing a stable economic framework and low inflation.

Is my hon. Friend aware of the dire state of the many east midlands machine tool companies? Is he aware of the real problems over on-going research? Will he consider some way to enable those firms to fund the costs of developing and bringing into use new and competitive machinery long before their existing equipment is out of date?

The Government spend about £3 billion a year on research and development, which is a higher proportion of gross domestic product than Japan spends, but I hear what my hon. Friend says. If there is a perceived market failure, we are prepared to act, as I have already shown by pointing out how much we spend. We found that a previous scheme, which was designed to help the machine tool industry—the small engineering investment scheme—was distorting business decisions. Normally the best way forward is to create a stable environment and to cut corporation tax so that businesses can make their own investment decisions, rather than to distort those investment decisions.