HC Deb 02 August 1976 vol 916 cc1184-7
2. Mr. Tim Renton

asked the Secretary of State for Industry what is the effect of public expenditure cuts on the NEB's programme.

4. Mr. William Hamilton

asked the Secretary of State for Industry what additional funds are to be made available to the National Enterprise Board in the course of the next two financial years.

Mr. Varley

My right hon. Friend the Chancellor of the Exchequer has declared the Government's intention to increase significantly the resources available for selective assistance to industry through the NEB and the Scottish and Welsh Development Agencies.

Mr. Renton

Does the Secretary of State recognise that most of the country will be appalled if, at a time when private consumption is cut and private investment is hamstrung by a new payroll tax, the Government continue on their profligate way, wasting money through the NEB? Surely the NEB is one of those unique birds that should be hatched out with its wings already clipped.

Mr. Varley

The hon. Gentleman may well be anticipating the debate that will take place later today, when the package announced by the Chancellor will be debated fully. The NEB is a major component of the Government's industrial strategy—we have never made any secret about that—and it must have the resources to operate.

Mr. Hamilton

Is not my right hon. Friend appalled by the gross interference of the President of the Confederation of British Industry, who has been advocating an investment strike in the private sector? In those circumstances, will my right hon. Friend give a categorical assurance that the funds available to the National Enterprise Board will be significantly increased, in particular in Scotland? Will he spell that out in much more detail, or is he leaving it to this afternoon's debate?

Mr. Varley

I cannot anticipate anything that my right hon. Friend the Chancellor will say this afternoon. We have said that the resources for the NEB and the Scottish and Welsh Development Agencies should be increased significantly. I cannot give a figure this afternoon, but we attach very high importance to ensuring that the NEB fulfils its major role of helping to regenerate British industry.

Mr. Grylls

Surely the Secretary of State should be able to say how much extra money the board is to be allocated during 1977–78, at least. He cannot get away with merely telling the House that the board is to have more money without being more specific. Will he say precisely what the figure is to be? Will he answer the question asked by my hon. Friend the Member for Mid-Sussex (Mr. Renton) about taking money with one hand from industry, in taxation, and, with the other, giving it out to the NEB ad lib? It does not make any sense.

Mr. Varley

This enables me to answer a point that I did not answer fully when it was raised by my hon. Friend the Member for Fife, Central (Mr. Hamilton). I think that the CBI has over-reacted to the package announced by my hon. Friend. I dare say that there will be discussions about it at the National Economic Development Council meeting on Wednesday. The package has to be seen as a whole. There have been relaxations in the Price Code, which will assist investment and assist companies.

On the question of the amount of any assistance to the NEB, we said in the White Paper that was published last year that the figures for next year and up to 1979–80 are necessarily arbitrary and will be kept under review. We are determined that resources shall be made available to the board. I ask the hon. Gentleman to be a little patient, because we shall make an announcement in due course.

Mrs. Bain

Is the Secretary of State aware that we on the Scottish National Party Bench are delighted that the NEB will have an increased budget, as we have pressed for this? Will he indicate whether the new budget will be anywhere near the £300 million per annum that we have asked for, and how many jobs he estimates that these funds will create in Scotland?

Mr. Varley

I am not at all sure that the Scottish National Party has been all the time wholly enthusiastic about the Scottish Development Agency. I cannot give the hon. Lady the information that she requires about the amount of money to be allocated to the agency. In any case, it is a matter for my right hon. Friend the Secretary of State for Scotland. However, the hon. Lady can be assured that additional resources will be provided.

Mr. Buchan

Does my right hon. Friend agree that the statement by the CBI amounts to a kind of sabotage of the Government's economic strategy? In comparing the relative attitudes of the CBI, on the one hand, and the TUC, on the other, will my right hon. Friend answer the question: who are the patriots now?

Mr. Valley

My hon. Friend is right, in the sense that the TUC and those who lead it have made considerable sacrifices on behalf of the country. I think that that is widely understood and recognised by most fair-minded people. I only hope that, on reflection—I do not want to say much more than that—those who lead the CBI will recognise that their comments have not been of help over the last few days.

Mr. Tom King

Will the Secretary of State explain what point there would have been in Lord Watkinson writing a letter at this time, when all the recipients of the letter would have been busily engaged in trying to calculate what effect the Chancellor's announcement would have on their next year's cash flow, not knowing what funds they had available? What discussions were held with industry in parallel with discussions held with the TUC before these announcements were made?

Mr. Varley

The question of discussions was not for me. [Interruption.] I believe that discussions took place between my right hon. Friend the Chancellor and representatives of both sides of industry and officials of the Department. If the hon. Gentlemen really wanted the industrial strategy to work and industrial investment to increase, he would be better occupied in calling on the CBI to adjust its attitude. That would be by far the better way of going about it. We know that investment will increase, on the basis of indications that we have already seen, and I suspect that when figures are published within the next few days they will show that many companies are going ahead with their investment decisions, in spite of what has been said.

Several Hon. Members

rose—

Mr. Speaker

Order. We shall have to go much quicker on the rest of the supplementary questions.