HC Deb 10 November 1966 vol 735 cc1532-4
Q6. Mr. Stratton Mills

asked the Prime Minister if the public speech of the Chancellor of the Exchequer on 20th October, 1966, at the Mansion House on economic affairs represents the policy of Her Majesty's Government.

The Prime Minister

Yes, Sir.

Mr. Stratton Mills

Is the Prime Minister aware of the growing lack of confidence in industry over the attitude of the Government to private investment and to the profit motive? Would the Prime Minister consider making an early statement on the Government's attitude to both of these subjects and would he also consider making an early statement on the proposals regarding industrial investment, the very serious decline in which can be seen?

The Prime Minister

What my right hon. Friend said at this dinner was exactly in line with what I said at the National Productivity Conference a few weeks earlier, when I said that we would be very concerned to hear any views that industry had about measures necessary to stimulate private investment. Since the time of my right hon. Friend's speech, at the Lord Mayor's Dinner, there has been the statement by the Governor of the Bank of England about credit for private investment.

Mr. Lubbock

What representations has the Prime Minister had from industry about broadening the investment grant system, and the need to be more selective in the encouragement of investment in particular types of new plant, and the need to encourage innovations, for example in the computer industry?

The Prime Minister

Most of the representations from industry have suggested that it is too selective and should be spread over a wider area. Our views on this have been made known to the House. We want to encourage manufacturing industry. There is special help for computers in the Government's proposals. With regard to the most recent views that we have had from industry, by which I understand the hon. Gentleman to mean the Confederation of British Industry, the discussions between the C.B.I, and my right hon. Friend are confidential and we had better await the outcome of them.

Mr. Mendelson

Is it not becoming increasingly clear that investment allowances and investment grants are not going to be sufficient? Is not the main obstacle to further investment and the reason for the cut-down in investment, the policy of deflation and the fear of so many industrialists that they might not be able to sell their goods if they increase investment? Is there not a need for a root and branch reform in the Government's economic policy? [HON. MEMBERS: "Hear, hear."]

The Prime Minister

I think that the root and branch reform that my hon.

Friend wants is not the same as that which hon. Gentlemen opposite want. I do not think that I had better add to what I have already said about investment policy. We were told that the biggest impediment was the shortage of immediate cash for investment, and this has been dealt with by the statement of the Governor of the Bank of England [Interruption.] If hon. Gentlemen think that they know so much more about it than perhaps many in industry, and have any evidence of firms wanting to invest, and not being able to get credit from the Bank, perhaps they will give the necessary information to the Chancellor of the Exchequer.