HC Deb 18 June 1969 vol 785 cc455-7
7. Mr. Patrick Jenkin

asked the President of the Board of Trade if he will give his latest estimate of the level of fixed investment in 1969, expressed as a percentage increase or decrease on the 1968 figure.

72. Mr. Sheldon

asked the President of the Board of Trade what estimate he has now made of the level of investment in 1969.

Mr. Crosland

An official estimate of total fixed investment in 1969 was published in the Financial Statement and Budget Report 1969–70 on 15th April. Results of the May, 1969, Investment Intentions Inquiry were published on Monday, 16th June.

Mr. Jenkin

Since the results of that inquiry showed that there is already a marked reduction in industry's expectations of investment, and since on the very day it was published the Chief Secretary to the Treasury told the Finance Bill Committee that on the latest information investment intentions were high, and satisfactory and that there was no reason to change the view on that, was not the Chief Secretary talking out of the back of his head?

Mr. Crosland

My right hon. Friend is notable for talking out of the front of his head and notable for his judgment and ripe experience. We must keep this matter in perspective. The investment inquiry to which the hon. Gentleman referred, while it showed that expectations in manufacturing industry were marginally down, also showed that expectations of investment in services and distribution were not down at all, and that expectations of investment in shipping were markedly up.

Mr. Sheldon

Since the most important aspect of investment concerns manufacturing investment, and this is what is causing great concern among many hon. Members, will my right hon. Friend see what can be done to stimulate this kind of investment, bearing in mind also the very serious concern expressed by the Bank of England Quarterly Bulletin?

Mr. Crosland

Investment in any of these sectors contributes to the growth and productivity of the British economy. I agree with my hon. Friend that manufacturing investment is crucially important, but I must point out that there is a limit to the extent of the investment boom that we can have in any year when we are trying for a rapid increase in exports, because exports and capital investments, to a very considerable extent, fall on the same sectors of industry—namely, the engineering sectors.

Mr. Hall-Davis

Does the right hon. Gentleman recall the categoric answer he gave me on 30th April, that there was no evidence of any turn-down in manufacturing industry investments? Would it perhaps not increase confidence in the Board of Trade's sensitivity to changes in trade if he was a little less categorical in future, when he has been overtaken by events so rapidly?

Mr. Crosland

I find it incredible that I was as categorical as the hon. Gentleman says. If he says that I was, then obviously I would admit it. I should like to make the general point because the right hon. Member for Leeds, North-East (Sir K. Joseph) mentioned this some weeks ago, that looking back over the history of the Board of Trade investment inquiries, they have tended to be more often on the pessimistic side than on the optimistic side.

Mr. Barnett

Is not the present shortage of capacity a lesson to us all of what past deflationary squeezes have done to the economy and to investment in particular? Will my right hon. Friend have words with his right hon. Friend the Chancellor with a view to mitigating the worst effects of the present squeeze on this vital aspect of the economy—manufacturing investment?

Mr. Crosland

The effect of the squeeze is something that my right hon. Friend and I and other Ministers keep constantly under review. I agree with the first part of my hon. Friend's question, that this crucial problem of a shortage of capacity has been due to a consistent failure on the part of this country over 20 years to invest a high enough proportion of its national income.

Mr. Higgins

Is it not quite ludicrous that we should have two headlines on the front page of the Financial Times, one reporting the right hon. Gentleman, the other reporting the Chief Secretary, both saying two totally different things? Would he co-ordinate his efforts with the Chief Secretary?

Mr. Crosland

I find it impossible to believe that my right hon. Friend and I could be at odds in any way. I will certainly look into the right hon. Gentleman's point and discuss it with my right hon. Friend.