HC Deb 06 July 1976 vol 914 cc1161-3
Q3. Mr. Mike Thomas

asked the Prime Minister whether the article by the Chancellor of the Duchy of Lancaster in the Sunday Telegraph on the economy on 20th June represents Government policy.

The Prime Minister

Yes.

Mr. Thomas

Does the Prime Minister agree in particular with his right hon. Friend's statement that what this country needs is not just investment but profitable investment, which makes good use of our resources, and that this must be the policy for the Government to follow? If so, what steps is he taking to follow it?

The Prime Minister

I thought it was a very good heading, which began: No reason for self-denigration, gloom or dangerous prescriptions. The article seemed in typical vein of my right hon. Friend, and it sparkled all the way through to the end of the cup. Regarding the matter of investment, I would say to my hon. Friend that the Price Code, on which my right hon. Friend, the Secretary for Prices and Consumer Affairs, answered questions yesterday, has now been revised. When all the particular interests have put their cases forward it should now provide an opportunity for investment at the right time, in this accelerating trade cycle. If British industry takes this up I believe that we shall be better placed than ever before, provided it is coupled with getting the best we can out of the existing investment that we already have.

Mr. George Gardiner

Will the Prime Minister assure the House that the cuts in public expenditure, which a number of his hon. Friends now tell us are necessary to make room for this investment, will be announced to the country and this House before we rise for the Summer Recess?

The Prime Minister

I do not think that I have anything further to add to what I have already said on this matter. I think my answers are quite clear.

Mr. Ron Thomas

Does my right hon. Friend not agree that report after report indicates that British investment allowances, and all the other aids to those so-called entrepreneurs, who gain so much support from the Opposition, perhaps the most generous among all the industrialised countries in the world, but that such people still fail to invest in Britain, while they find thousands of millions of pounds to invest overseas?

The Prime Minister

My hon. Friend raises a point that is worthy of investigation and study, namely, to what extent it is necessary for British companies which have overseas direct investment to maintain the level of that investment or, indeed, to seek to retain their profits abroad. This is a matter that I have been looking into very carefully. Certainly there is a very high level of investment overseas. We ought to make certain that the profits are remitted back as far as possible, if the investment takes place.

It is true that on occasions, as our predecessors found, additional allowances did not encourage domestic investment to the degree that was expected. I think that the National Enterprise Board is one weapon for trying to help in that situation by the schemes it is producing. The other way, apart from ensuring that the firms concerned have adequate profitability, is to see that there is a likelihood of the trade cycle continuing for some time. That is what the leaders at Puerto Rico were concerned about, and I think it is essential if we are to succeed.