§ Q1. Mr. Blakerasked the Prime Minister if he will advise the appointment of a Royal Commission to examine the cost-effectiveness of incentives for industrial investment.
§ The Prime Minister (Mr. Harold Wilson)No, Sir.
§ Mr. BlakerDoes the Prime Minister recall that over a year ago he told the House the Government were studying the effectiveness of investment grants? In view of the fact that since then nearly £600 million of taxpayers' money has been spent on investment grants but that this has been accompanied by a rise in unemployment, does he think the taxpayer is getting value for money?
§ The Prime MinisterYes, Sir. This study is going on, and in 12 months from that time there has been a substantial increase in investment, which I am sure the hon. Gentleman will have welcomed, in manufacturing industry, in shipbuilding and elsewhere.
§ Mr. SheldonIs my right hon. Friend aware that, although there is some need 1446 to sharpen up the use of these investment grants, they have been a big improvement on investment allowances whereby such things as fur coats were allowed, and that investment grants now go to people who actually invest?
§ The Prime MinisterYes, Sir, and they also go to small companies, not just to those with a big taxable profit. I also remember that when I was Chairman of the Public Accounts Committee we found some scandalous cases where large tax allowances, running into tens of millions, were going to companies which had not even paid the tax on which the refund was being made.