HC Deb 17 January 1974 vol 867 cc905-6
16. Mr. Golding

asked the Chancellor of the Exchequer what estimate he has made of the economic consequences to the country of the cuts in invstment in the nationalised industries.

28. Mr. Stott

asked the Chancellor of the Exchequer what estimate he has made of the economic consequences to the United Kingdom of the cuts in investment in the Post Office.

Mr. Tom Boardman

My right hon. Friend made it clear that there was a need to reduce demand on scarce investment resources. It is right that the nationalised industries, excluding the energy industries, should make a contribution to this.

Mr. Golding

Is the Minister aware that the cut of £140 million in investment next year in telecommunications will be disastrous for the telephone service? Is he further aware that for commerce and administration an efficient telecommunications service is as vital as energy to manufacturing industry? Does he understand that the disruption of the equipment manufacturing industry will bring a heavy increase in unemployment to the development areas?

Mr. Boardman

Yes, I am aware that it creates problems within the Post Office. My right hon. Friend the Minister of Posts and Telecommunications is discussing this matter with the industries concerned. There has been no cut in the aid or support given to the regions. I invite the hon. Gentleman to compare the level of investment in the Post Office for the past three years with that which was approved during the period of the previous administration.

Mr. Stott

Is this a once-for-all cut with the obvious disastrous consequences which have already been outlined by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding)? Will the planned level of investment for subsequent years remain unchanged?

Mr. Boardman

My right hon. Friend the Chancellor of the Exchequer has made it clear when talking about taking £1,200 million out of the 1974–75 expenditure that that will mean the deferment of a number of plans for the nationalised industries and for the public sector generally. These are areas in which it is vital that demand should be reduced so that essential resources may be conserved.

Mr. Joel Burnett

Does not the Minister consider it outrageous that he should persist with cuts in the steel industry in view of the present state of the industry and the effect which such cuts will have on everything else? Will he advise his right hon. Friend to reverse the decisions which have been made regarding the steel industry?

Mr. Boardman

The hon. Gentleman must be well aware of the massive investment programme approved for the steel industry of £3,000 million. I ask him to contrast that with the insignificant or very small investment which was approved by the previous administration. The cuts which are being made in the steel industry are such that they will not affect long-term strategy. The impact on the output of steel has, as the hon. Gentleman knows, nothing to do with investment but is related to other causes which are highly regrettable.