§ One of our major objectives must be to ensure that this rise in investment comes about and is maintained, because on this depends our prospect of achieving sustained growth at a high rate and with a high level of employment.
§ As a result of the changes we have already made, we now have in the United Kingdom a more generous system of national incentives for industrial investment than in any member country of the enlarged Community or in the United States. Furthermore, I reaffirm the intention that the new system of investment incentives should endure at least until the end of the EEC transitional period, that is 1st January 1978.
§ With these exceptional incentives already in operation, I have no doubt that the most effective way to encourage a higher level of investment is to pursue a policy which industry and commerce know will result in a sustained rate of growth of demand. This means aiming at a growth of demand over the next year or 18 months which is sufficiently high to maintain a steady movement towards the full use of our productive capacity, but not so extravagantly high that when all the slack has been taken up we have to change gear abruptly and so damage confidence in the prospect of sustained expansion.
§ In the light of all these considerations I have come to the conclusion that 249 the Budget should on this occasion be broadly neutral. I believe that on this basis the economy will continue to grow at an annual rate of around 5 per cent. over the 18 months from the second half of 1972 to the first half of 1974.
§ I must stress, as my predecessors have, that this is a "central forecast" and subject to the many uncertainties to which, as every former Chancellor knows, such predictions are necessarily subject. For this reason, I shall if necessary not hesitate to act at any time of the year, in whatever direction the economy may require, on expenditure, on taxation or on monetary policy.