§ 1. Mr. Sheldon
asked the Chancellor of the Exchequer what estimate he has made of the level of investment in plant and machinery for the first quarter of 1971.
§ The Chief Secretary to the Treasury (Mr. Maurice Macmillan)
No estimates are yet available.
§ Mr. Sheldon
As the Government have repeatedly stated that the change-over from investment grants to investment 208 allowances has no disadvantageous effect upon investment, and as the Financial Statement forecast shows that only ½ per cent. increase in investment is expected next year, which will be two years after the Government came into office, will not the Chief Secretary accept that there is great disquiet about the effect of this time lag extending over two years?
§ Mr. Macmillan
One cannot extrapolate in the way that the hon. Gentleman has done. I merely said that the estimates are not available.
§ Mr. Hordern
Is not the problem about industrial investment that the return on industrial assets fell over the last six years from 15 per cent. to 10 per cent. and that the cost of borrowing exceeds the return on industrial investment? Is it not rather a nerve on the part of a member of the Labour Party to table a Question such as this, because by raising corporation tax and by other measures the Labour Government were entirely responsible for this state of affairs?
§ Mr. Macmillan
Yes, Sir; my hon Friend is quite right. Although we are doing everything we can to encourage investment through incentives, the main incentive is the expectation of profit and the liquidity to invest, both of which were severely damaged by the efforts of right hon. and hon. Members opposite when they were in Government.