§ 9. Mr. Duffyasked the Chancellor of the Exchequer what financial incentives he now proposes to introduce to stimulate investment in manufacturing industry.
§ Mr. Patrick JenkinThe economy is now growing fast, and rising demand, 1173 coupled with the new national and regional incentives, will stimulate investment.
§ Mr. DuffyIs the hon. Gentleman aware that according to the DTI's latest survey almost half the firms engaged in manufacturing industry are even more pessimistic about future investment than they were before the Budget, before the setting up of the Industrial Development Executive and before the publication of the Industry Bill? Is the hon. Gentleman aware, further, that this lack of confidence in the British economy, like the lack of confidence in international sterling, is the free enterprise market's assessment of the Chancellor's management of the British economy over the last two years?
§ Mr. JenkinIt is fair to point out that the DTI survey is only one of several. I have in mind especially the CBI survey and the Financial Times survey of business opinion, which show a remarkable strengthening of investment intentions since the Budget measures and point to a substantial rise in investment in the year ahead. I agree with the hon. Gentleman to the extent that in so far as there is hesitation in investment, it reflects some doubts about the future. But let the hon. Gentleman be in no doubt that the anxieties arise because of the fear of inflation, and that by far the biggest single element in rising costs and prices is inflationary wage claims and settlements.
§ Mr. DouglasIs the Government's figure for gross domestic fixed capital formation on target?
§ Mr. JenkinWe are looking for a significant increase in the volume of investment this year, and we are confident that it will come.