HC Deb 08 November 1976 vol 919 cc10-2
7. Mr. Arnold

asked the Secretary of State for Industry whether he is satisfied fled with the current level of investment in manufacturing industry.

The Secretary of State for Industry (Mr. Eric G. Varley)

No. I hope to be able to announce new measures in the near future to encourage more investment.

Mr. Arnold

Is not the policy of dear money fatal to industry? Since in 1971–72, under the then Conservative Government, the minimum lending rate went as low as 5 per cent., does not the right hon. Gentleman agree that a minimum lending rate of 16 per cent, makes it virtually impossible to borrow money for investment in manufacturing industry?

Mr. Varley

I agree that that is one of the factors involved. My right hon. Friend the Chancellor of the Exchequer has made it plain on more than one occasion that he hopes that the minimum lending rate will come down so that we can stimulate investment. If we had more support from the Opposition on some of the economic measures we are pushing through, I am satisfied that industrial confidence would improve. The Opposition are doing all they can to destroy confidence and undermine our currency, and they never cease to take the opportunity to do so.

Mr. Flannery

Will my right hon. Friend accept it from me that British private industry would be in a far more powerful position than it is now if the Opposition were to persuade their patriotic friends to invest in industry, because there has been a strike in terms of capital in that respect for some years? Will he encourage those people to put that money into investment because, although they always talk about these matters, they regularly ask for public funds to boost faltering private industry?

Mr. Varley

There is a great deal in what my hon. Friend says. The Opposition have been completely irresponsible in the last few months and have contributed a great deal to the present situation.

Mr. Hordern

Will the Secretary of State explain how manufacturing industry is to invest more when the Government need to borrow every single penny which is available in the private sector for the whole of next year? Was not this situation reflected in the weekend Press in articles to the effect that the Government's borrowing requirements will grow by another £2,000 million? Does not that make the Government's industrial strategy a complete and utter farce?

Mr. Varley

That is the kind of comment to which I referred earlier. The Opposition and their friends time and again do not contribute to the rebuilding of British industry but take every opportunity to snipe at our industrial strategy. The House knows about the tripartite arrangements that are being built up through the NEDC. Therefore, I ask the hon. Gentleman and his hon. Friends not to indulge in consistent carping criticism but to help the country to get back on its feet. I am afraid that the hon. Gentleman and his Friends are doing all they can to undermine the strategy.

Mr. Watkinson

Has my right hon. Friend noted that the profitability of industry this year is rapidly increasing? Therefore, does he not agree that it is essential for industry to be encouraged to invest those funds? Does he not think that a prime element in that progress is to bring about an increased number of planning agreements between the Government and industry?

Mr. Varley

I shall be answering a series of Questions on planning agreements presently. We have done a great deal as a Government to help to stimulate investment—for example, in terms of the Accelerated Projects Scheme and some of the other industrial schemes which we have developed. Such schemes are generally of value to British industry. Unlike the hon. Member for Horsham and Crawley (Mr. Hordern), others recognise those arrangements as extremely valuable. It is a pity that the Opposition do not do more to help in this regard.

Mr. Heseltine

Does not the right hon. Gentleman understand that it is the policy of the present Government that is in ruins and that the Opposition have consistently been telling the Government what they should do? They should cut public expenditure, drop nationalisation and deal with the £11,000 million deficit on borrowing. Until the Government take that action, we shall not see the recovery of investment.

Mr. Varley

The hon. Gentleman, in common with all his colleagues on the Opposition Front Bench, is always in favour of cutting public expenditure in general but never in particular. Time and again they come forward asking the Government to increase public expenditure. We have heard such pleas this afternoon during Question Time. The hon. Gentleman knows full well that progress has been made following the disastrous 1973 period when we saw Lord Barber and his right hon. Friends then in Government spurring on the inflationary spiral. The hon. Gentleman knows the difficulties experienced since that time.