§ 4. Mr. Crouchasked the Secretary of State for Industry what further measures he is considering to promote investment in and by manufacturing industry.
§ The Secretary of State for Industry (Mr. Eric G. Varley)I shall take every opportunity to encourage investment by whatever means are appropriate.
§ Mr. CrouchDoes the Secretary of State agree that while we have made progress in reducing inflation to 18 per cent. in the last 12 months, we have succeeded in increasing industrial investment by only 1 per cent.? Does he not agree that the time has come to restore a higher level of profitability to industry so as to encourage greater investment?
§ Mr. VarleyProfitability is certainly important in creating confidence in industry. I cannot anticipate the Price Code which will be published by my right hon. Friend later this week. I should have thought that real progress had been made in breaking the back of inflation. The recently negotiated pay agreement, which was practically unanimously endorsed by the trade unions at their special congress, has helped to improve the climate. Recent surveys have shown that confidence is building up in industry. The Department's own survey anticipates investment increasing by 15 per cent. next year over this year.
§ Mr. Ronald AtkinsIs my right hon. Friend aware that this country has been suffering from a lack of investment since 1900? Our ever-worsening position has been hurting the country so much that we 6 have turned to public investment. Does my right hon. Friend agree that that is why, among other reasons, the National Enterprise Board has been set up to ensure that investment goes into the right areas?
§ Mr. VarleyThe NEB is certainly playing its part, but we have other legislative instruments to use to help promote investment where appropriate. We have Sections 7 and 8 of the good old Tory Industry Act 1972. We have used that extensively for the last two and a half years, particularly to improve investment in the motor car industry, although the Conservatives, of course, voted against that aspect.
§ Mr. NelsonSince the Minister thinks that the NEB is doing so well, the House will be interested to know what response he would make to the severe criticisms of the guidelines of the NEB that were made by the Association of British Chambers of Commerce and the Public Accounts Committee. Will he take this opportunity to refute any suggestion that substantially larger amounts of funding should be available to the board, as the Labour Party's home policy committee has proposed?
§ Mr. VarleyI will not refute that because I am interested in ensuring that the board should have adequate funds to invest in what we have described as the profitable sector of British industry. We shall continue to make funds available to the NEB.
§ Mr. HefferIs my right hon. Friend aware that if there is a retreat on the Price Code, and if that goes too far, there will be a great deal of resentment, particularly in view of the decision of the TUC on wages agreement? Are there any guarantees that the extra profits available will be used for investment and not for other purposes?
§ Mr. VarleyI cannot anticipate the consultative document which will be produced later this week, but I agree with my hon. Friend. If the Price Code were to be abandoned now, there would be very serious repercussions. The Government have maintained over the last few months that price control will remain.
§ Mr. HeseltineWill the right hon. Gentleman now confirm that the level of 7 industrial manufacturing investment is lower than in any year during the last Conservative Government? What does he think will be the effect on investment programmes of the 2½ per cent. increase in bank lending rates?
§ Mr. VarleyThe current low level of investment which has been taking place for the last two years reflects, and has reflected, the world economic situation. I have given figures to show that investment intentions are improving, and we shall have to wait and see how these turn out.