HC Deb 01 February 1967 vol 740 cc496-7
33. Mr. Bruce-Gardyne

asked the President of the Board of Trade if he will publish the calculations on which he based his latest forecast that there will be no drop in private industrial investment in 1967.

Mr. Jay

Although the latest official inquiry shows that manufacturers expect lower investment in 1967, their forecasts took little or no account of the recent increases in investment grants. I hope that, with the realisation that our measures justify long-term expansion and with the easier position of finance for investment. the outcome for 1967 will be better than forecast.

Mr. Bruce-Gardyne

Has the right hon. Gentleman overlooked his Department's latest forecast of a 10 per cent. drop in manufacturing investment this year? Will he confirm that this would mean that the level of manufacturing investment would, at constant prices, be substantially lower than it was in 1961 and not much higher than it was in 1960?

Mr. Jay

The hon. Gentleman is overlooking the fact that that forecast was made before the increase in investment grants and before the recent reduction in Bank Rate. He will see, therefore— if he thinks about the matter— that what he described may not be the position. He may also be interested to know that private investment in the last few months has actually turned out to be a good deal higher than in the previous forecast.

Mr. Barnett

As conditions change, would it not be better to ignore the unhelpful and over-clever forecasts made by hon. Gentlemen opposite and instead publicise the large amounts of money available to banks to lend for investment purposes?

Mr. Jay

Investment up to date has been running at a high level, but I am sure that the hon. Gentleman opposite is doing his best.

Sir C. Osborne

Since the Minister's latest figure, issued by his Department, showed a reduction in production of 4½ per cent—the lowest for three years— how does he expect private employers to increase their investment in view of the squeeze and freeze which the Government are still imposing?

Mr. Jay

The industrial production index raises another question. As I said, the investment grants have been increased and there has been a reduction in Bank Rate. We can look forward with more confidence to 1967.

Mr. Harold Walker

Will my right hon. Friend seek to make greater use of the powers of the Industrial Reorganisation Corporation to make substantially increased Government investment in the private sector, with particularly increased shareholdings in the motor car industry?

Mr. Jay

We are already making very considerable, and increasing, use of the I.R.C.

Mr. Corfield

Does the right hon. Gentleman recall that when he introduced the Industrial Development Bill he assured us that the investment grants therein contained would be very much more attractive than those which they replaced? Can he give any hard and fast evidence to show that increased industrial investment has occurred?

Mr. Jay

One hard and fast piece of evidence is the increased demand for factory space in the development areas over that period.

Mr. Bruce-Gardyne

In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.