HC Deb 17 March 1970 vol 798 cc193-4
32. Mr. David Howell

asked the Chancellor of the Exchequer whether, in the light of the most recent Confederation of British Industry assessment of investment pospects, he will now take steps to reduce interest rates.

28. Mr. Eadie

asked the Chancellor of the Exchequer whether he has considered the publication, Industrial Trends, Survey No. 37, February, 1970, published by the Confederation of British Industry, a copy of which is in his possession; and if he will make a statement.

Mr. Roy Jenkins

I give careful consideration to the C.B.I. Survey of Industrial Trends, as I do to other indicators of the development of the economy. The most recent official inquiry into investment intentions revealed a continuing upward trend in manufacturing investment, and it would certainly be premature to conclude from the C.B.I. survey that there has been a significant worsening in investment prospects. As to the level of interest rates, this is affected by external as well as domestic factors. I am not prepared to make statements on interest rate policies and prospects for the future.

Mr. Howell

Although I appreciate that Bank Rate has been reduced by ½ per cent. since my Question was tabled, will the Chancellor recognise that in many industries the overwhelming view is that new processes and equipment are not going in at an adequate rate to ensure high exports and intensive competition in the coming years? Will he watch this situation with the most careful attention, be cause it is not yet satisfactory?

Mr. Jenkins

I do watch this situation with the most careful attention. It is perhaps, of all the major factors in our economic situation, the one on which one gets the most conflicting evidence at the present time. As the hon. Gentleman and the House will be aware, what appears to be the case is that 1969 showed a good rate of increase, and I hope to see a good rate of increase in 1970 too, but I will certainly keep it under review.

Mr. Henig

Is my right hon. Friend aware that there is great public mystification why, after the recent reduction of Bank Rate and thereby interest rates, the building societies, which were quick to increase mortgage rates when Bank Rate went up, immediately announced that they would not reduce mortgage rates? Will he explain why this is so, so that the public may be informed of these important matters?

Mr. Jenkins

This is a quite separate question. As far as I am aware, only one building society has made a statement bearing upon this. I think my hon. Friend should put down a Question on this, rather than raise it on a quite different Question.