§ 14. Mr. Kenneth Bakerasked the Chancellor of the Exchequer what was 1460 the level of investment in British industry in the third quarter of 1971, and what estimate he has made of its level in the fourth quarter.
§ Mr. Maurice MacmillanFigures for manufacturing industry's investment in the third quarter are not available yet. The results of the latest official inquiry into investment intentions imply that manufacturers are expecting capital expenditure to be somewhat lower in the current half-year as a whole than in the first half of 1971.
§ Mr. BakerHas my hon. Friend seen the optimistic forecast by the C.B.I. and in the Financial Times of business intentions about the level of capital investment in the latter part of this year and the beginning of next year? Does not this reflect growing confidence in British industry in the expansionist measures of the Government? In particular, is there yet sufficient evidence to make a judgment upon the extension of free depreciation to development areas?
§ Mr. MacmillanOn the latter part of my hon. Friend's supplementary, the evidence which he quotes is not yet decisive. There are indications which justify optimism.
The expansionist policies of the Government, as my hon. Friend rightly points out, are increasing optimism on the part of industry. There are signs that where before there was interest, this interest is now being translated into orders.
§ Mr. SheldonIs the hon. Gentleman aware that it is extraordinarily difficult to understand his optimism in the face of some appalling figures which have come out today which indicate that the level of investment in machine tools in Britain will be a third down on last year's figures, bad enough as they were? Does he relate these appalling figures to the withdrawal of the investment grants scheme?
§ Mr. MacmillanNo. The fact that the figures show that this year expenditure is down and that the investment intentions survey shows little change in manufacturing investment between 1971 and 1972 suggests that there will be an increase in 1972.
§ Mr. FellDoes the possible increase in investment, about which my hon.
1461 Friend talks, apply to investment by British industry in this country, or does it include possible investment by British industry abroad?
§ Mr. MacmillanThe figures in the survey of intentions to which I have referred relate to investment in manufacturing industry in this country.
§ Mr. James HamiltonWill the Minister take cognisance of the statement made last week by the C.B.I. in Scotland which is deeply concerned about the lack of investment there, and does he agree that one of the main reasons for that is the departure from the system of investment grants? Will he now recognise that unless the Government are prepared to do something about it we shall have 150,000 unemployed in Scotland before the end of the year?
§ Mr. MacmillanThe investment inducements in Scotland and the other development areas are considerable and sufficient when the general recrudescence of investment comes.
§ Mr. Roy JenkinsMay I ask the hon. Gentleman whether I heard him aright in the apparently somewhat gnomic answer which he gave a few moments ago? I understood him to say that the figures showed that investment in 1971 was down and that the survey showed that in 1972 it would be much the same as in 1971, from which he deduced that it would rise in 1972.
§ Mr. MacmillanYes. If one works it out, the latest official inquiry into investment intentions indicates that there will be little change in manufacturing investment between 1971 and 1972. If there is a falling-off in the latter half of 1971 in order that 1971 may be the same as 1972, it indicates that there will be an increase in 1972.