§ 3. Mr. Meacherasked the Chancellor of the Exchequer what percentage change compared to a year ago is shown by the last quarter capital investment figures where information is available.
§ Mr. NottThe recorded level of gross domestic fixed capital formation in the fourth quarter of 1972 was little changed from its level in the corresponding quarter of 1971. But it is expected to rise strongly during 1973.
§ Mr. MeacherIs not the Minister aware that the latest evidence at current prices shows not only a strike among capital investors but a collapse in profit rates last year to an all-time low of less than half the rate of a decade ago? As falling profits cannot boost capital investment, and falling capital investment cannot boost profits, is not this the death knell of private capital accumulation in this country?
§ Mr. NottThe Labour Party's unfulfilled promises of growth left a legacy of idle plant and machinery which had to be brought into productive use before new investment was made. It is 654 true that the share of profits in the national income has been falling for a number of years, as it has in most Western countries. Between the fourth quarter of 1971 and the corresponding quarter of 1972 the share of profits fell from 12⅓ per cent. to 11¾ per cent., while the share of wages rose from 68½ per cent. to 69⅓ per cent. I should have thought the hon. Gentleman would welcome that. As for the outlook for capital investment, all the surveys are extremely promising.
§ Mr. MeacherThat is wishful thinking.
§ Mr. DouglasWill the Minister comment on another important item in investment—the build-up of stocks? In view of the current trade figures, will he say how much of the import figure represents items likely to be re-exported?
§ Mr. NottA substantial stock rebuilding programme appears to be in process. That has to some extent affected the import figures for March. In due course many of those stocks will come through in manufactured goods and be exported. The build-up of stocks will in the end greatly benefit our exports.
§ Mr. SheldonThe House will note with surprise the Government's continuous optimism about the rate of investment in industry. The latest figures show that the level of manufacturing investment at the end of last year was lower than it had been at any period since 1967. When will the Government do something about this most important matter?
§ Mr. NottI can only repeat that all the surveys are very promising. They indicate that the level of manufacturing investment is likely to be higher in 1973–74 than for many years. Indeed, all the signs are that it could be a record.