HC Deb 14 December 1971 vol 828 cc245-7
18. Mr. Tugendhat

asked the Chancellor of the Exchequer whether he proposes to make any changes in the regulations governing direct industrial investment coming into this country from foreign-owned companies.

Mr. Maurice Macmillan

My right hon. Friend does not propose any changes at present.

Mr. Tugendhat

Does the Chief Secretary accept that that is a disappointing answer? This country needs substantially to increase the level of industrial investment. One of the advantages of joining the Common Market should be that we attract more investment from international companies, both American-owned and Continental. Will my hon. Friend bear in mind that the present restrictions requiring these companies to bring in sufficient funds to cover the value of their fixed capital assets is a disincentive and that the level of investment might be improved if he did something about it?

Mr. Macmillan

My right hon. Friend is certainly well aware of the value of foreign investment in this country. We will bear in mind the point which my hon. Friend makes.

20. Mr. William Hamilton

asked the Chancellor of the Exchequer if he will make a statement on recent trends in private investment.

Mr. Maurice Macmillan

Provisional figures published yesterday, 13th December, indicate that in the third quarter of this year manufacturing investment was at the same level as in the second quarter. There was a further rise in the third quarter in investment in the distributive and service industries, excluding shipping.

Mr. Hamilton

Does not the hon. Gentleman agree that those figures are very depressing? Will he say what is his estimate of the trend in the next 12 months and when there will be some effect on the disastrous unemployment figures that are repeatedly referred to in the House?

Mr. Macmillan

The reflationary action taken by the Government will help industrial investment by strengthening demand generally. The fact that the estimates for the third quarter have remained unchanged from the estimates for the second quarter suggests that the fall in manufacturing investment may well have been halted.

Sir Harmar Nicholls

Will my hon. Friend bear in mind that the Conservative answer is the true one? The one thing that will bring about investment in the private sector is lower taxation and no Government interference.

Mr. Macmillan

I have noted my hon. Friend's contribution.

Mr. Roy Jenkins

Will the hon. Gentleman not rest upon that piece of dogma, which has proved peculiarly inappropriate over the past year? Will he also recognise that these investment figures in what they mean for the future are the most disturbing of all the depressing indices in the economy at the present time? What the Chancellor of the Exchequer has done is to stimulate demand generally. Will not the hon. Gentleman tell us whether he has further measures in mind to ensure that 1972 is not as uniquely dismal a year from the point of view of private fixed investment as 1971 has been?

Mr. Macmillan

In spite of the contrasting dogma, my right hon. Friend's ideas have produced more successful results than the right hon. Gentleman did in his period of office. I do not think that the adoption of the kind of fine tuning and forecasting of economic planning which was so disastrous during the period of office of the previous Government is a sensible suggestion to make at this time.