HC Deb 26 January 1971 vol 810 cc310-2
21. Mr. Sheldon

asked the Chancellor of the Exchequer what estimate he has made of the trend in manufacturing investment in 1970 and 1971.

28. Mr. Kenneth Baker

asked the Chancellor of the Exchequer what was the increase in industrial investment in 1970; and what he expects it to be in 1971.

Mr. Maurice Macmillan

The volume of manufacturing investment in the first threequarters of 1970 as a whole was about 4 per cent. higher than in the corresponding period of 1969. The latest official survey of investment intentions, conducted by the Department of Trade and Industry in November-December, 1970, showed that manufacturers were then expecting a small fall of about 2 per cent. between 1970 and 1971.

Mr. Sheldon

Is it not an extremely serious matter that manufacturing industry, so far from increasing investment, is allowing it to decline? Is the hon. Gentleman sure that the ending of investment grants was the right approach to this problem?

Mr. Macmillan

I think that the hon. Gentleman is right in that the intentions expressed would indicate a very unsatisfactory situation, but they are intentions. I think that the Government's policy of replacing investment grants will help, together with our general economic policies, to create a climate more favourable for investment which we shall see not in intentions but in practice in due course.

Mr. Baker

While appreciating that the survey of investment intentions is disappointing, may I press my hon. Friend to be determined to bring in the scheme of investment allowances, since this will stimulate effective investment? It is the effectiveness, through profitability and productivity, of investment which is important rather than its overall level.

Mr. Macmillan

I agree that the outlook revealed by the survey is disappointing but the White Paper on Investment Incentives made it clear that the Government intend to take my hon. Friend's advice—if I may put it like that—and I emphasise that the quality of investment is extremely important. It is quality as much as quantity which has been defective in the past which we have inherited.

Mr. Dell

Has the hon. Gentleman noted the postponement of a very high quality investment which Shell was to make at Carrington? Does he consider that Shell's change of mind had anything to do with the change in investment incentives?

Mr. Macmillan

As I understand it, it is a temporary suspension, and I cannot possibly interpret the reasons for any particular company's investment decision in the light of its own general circumstances.