HC Deb 14 July 1966 vol 731 cc1689-90
6. Mr. Biffen

asked the President of the Board of Trade what estimates he has made of the likely levels of investment in buildings, plant and machinery by manufacturing industry during 1966 and 1967; and if he will make a statement.

23. Mr. Gresham Cooke

asked the President of the Board of Trade what the general prospects are for industrial investment in the coming year; and how industry's present investment intentions for 1966 and 1967 compare with their intentions as expressed at the end of last year.

Mr. Darling

Recent surveys suggest that industry now expects to spend less than was intended at the end of last year when it was estimated that investment would be about the same in 1966 and 1967 as in 1965. I do not believe that there will be any very large reduction.

Mr. Biffen

Is the right hon. Gentleman aware that the National Plan foresaw an increase in manufacturing investment at an annual rate of 7 per cent.? As that seems likely not to be realised, do the Government propose to take any special steps to remedy this?

Mr. Darling

If the hon. Gentleman will look at the National Plan again, he will see on page 56 that it was recognised that the short-term measures to assist the balance of payments and reduce the pressure of demand in overloaded sectors of the economy might lead to some temporary slackening in private investment.

Mr. Gresham Cooke

Is it not rather sad that plans for industrial investment are lower than they have been for several years and does not this foreshadow a sort of forthcoming stop-go?

Mr. Darling

I do not think so because, as the hon. Gentleman knows, Government action cannot entirely eliminate the cyclical character of industrial investment. I would remind the hon. Gentleman that the selective measures used by the Government to control demand are not so far producing the sharp down-turn in manufacturing investment that was experienced in 1962–63.

Mr. Sheldon

Is my right hon. Friend aware that a decline in investment would be the most important economic feature of this year, with most serious economic consequences, and that other measures, however unpalatable, would be more palatable than this, including the quantitative restriction of imports?

Mr. Darling

Yes. I do not quarrel with my hon. Friend's view on this, but I would point out that the new grant scheme which has been introduced has not yet had time to exert much influence on investment, and I am confident that it will prove to be a more effective instrument than the old system, once manufacturers get accustomed to it.

Mr. Barber

In view of what my hon. Friend said about the average of 7 per cent. referred to in the National Plan, and the fact that for the first time since 1963 the Confederation of British Industry's investment intentions show that investment this year by manufacturing industry is expected to fall, surely the National Plan will have to be revised considerably, will it not?

Mr. Darling

I should not think so, but we will see how we go on.