HC Deb 11 December 1956 vol 562 cc216-8
37. Mr. Cronin

asked the Chancellor of the Exchequer what action he proposes to take to increase the volume of investment in manufacturing industries.

Mr. Walker-Smith

Fixed investment in private manufacturing industry has been rising quickly in the last two years. Last year the rate of increase was over one-quarter by value and about one-fifth by volume. In the first half of this year the same rate of increase was maintained. While this rapid growth of investment is to be welcomed, a degree of restraint on all forms of spending at home remains necessary in order to assist the balance of payments.

Mr. Cronin

While thanking the hon. and learned Gentleman for that somewhat complacent answer, may I ask whether he is aware that the volume of investment in manufacturing industries is dropping behind that in Soviet Russia, the United States, Western Germany, Italy, and most of our competitors?

Mr. Walker-Smith

It is, of course, true that some countries are devoting more of their national output to investment than we are able to do, but I think that we have a good record, having regard to our defence commitments.

Mr. H. Wilson

Is not the hon. and learned Gentleman aware that it has been the policy of the Chancellor throughout this year to try to cut down investment? Our national investment is now falling while Germany's is increasing sharply, with all that it means in the export markets. Will the hon. and learned Gentleman now consider introducing a system of control which will hold back the inessential investment in order vastly to expand the essential investment?

Mr. Walker-Smith

I know that the right hon. Gentleman has something of a King Charles' head about this, if I may so term it without disrespect, but the items which he has so much in mind really loom far less largely in this matter than he would like the House to believe.

Mr. Roy Jenkins

Does the hon. and learned Gentleman's original Answer mean that the Government now want investment in manufacturing industries to go up or down?

Mr. Walker-Smith

The rate of investment in the manufacturing industries is holding pretty steady. That does not mean that the pattern of it is necessarily steady because, as the hon. Gentleman knows, as a result of the measures taken, investment tends to improve in that sector of manufacturing industries which particularly contribute to exports and the balance of payments.

Mr. Jay

Could the Economic Secretary answer the very simple question put to him? Do the Government want to see investment go up or down?

Lieut.-Colonel Lipton

Yes or no?

Mr. Walker-Smith

We hope that it will continue to go up, but we want the upward trend to be without prejudice to the balance of payments position of this country.