National Enterprise Board

HC Deb 28 April 1977 vol 930 cc1462-4

2. Mr. Hooley

asked the Chancellor of the Exchequer if he will now authorise additional resources for the National Enterprise Board.

The Chief Secretary to the Treasury (Mr. Joel Barnett)

A total of £1,225 million has been allocated for the years 1976–77 to 1980–81. This includes an extra £100 million for the years 1977–78 and 1978–79, which my right hon. Friend the Chancellor of the Exchequer announced on 15th December 1976. The provision for later years will be reviewed in the normal way in the course of this year's public expenditure survey.

Mr. Hooley

Has my right hon. Friend seen the recent report of the National Economic Development Office, which suggests that manipulating the exchange rate is not the best way to promote exports? Does he agree that exports depend much more on design, productivity and quality, which in turn depend upon investment? Will he look again at the allocation to the NEB in the light of the need for a much higher level of investment in British industry?

Mr. Barnett

I certainly agree with my hon. Friend that this question of investment and industrial performance in exports generally is not a simple matter of the exchange rate. It is a matter of industrial performance and design, as he said, and the total level of investment. As I have indicated, we shall certainly look into the whole question of the amounts to be made available to the National Enterprise Board during the course of the present year's survey.

Mr. Adley

Will the Chief Secretary confirm that the devaluation of the currency which has occurred since this Government came to office is one factor which has led to higher food prices having to be paid by the housewife?

Mr. Barnett

I would not do that. I am sorry that the hon. Gentleman seeks to make that kind of point. The fact is that the matter is much more complicated than that, as he very well knows. [HON. MEMBERS: "No. He does not."] My hon. Friends might be right. He does not know.

World commodity prices are not within our control but, of course, exchange rates and the level of our own exchange rate have some bearing, although we must look much further than that. The level of our exchange rate depends upon our industrial performance, and poor industrial performance in this country did not start three years ago.

Mr. Stan Crowther

Is my right hon. Friend aware that there are large numbers of advance factories standing empty in industrial estates in regions of high unemployment? Would it not be sensible to allow the National Enterprise Board sufficient funds so that it can adopt an initiating role and establish industrial production in these factories? Does my right hon. Friend agree that not only would this reduce unemployment, but it would meet the point made by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) about import substitutions and perhaps help us to improve the balance of payments?

Mr. Barnett

I very much agree with what my hon. Friend said. I am sure that he will have noted that we both agree with what the Prime Minister said a short time ago. He told the House on 3rd March that he has asked the NEB to investigate the possibility of its investing in the regions, particularly in the North-East and the North-West.

Mr. Grylls

Is it not rather odd to be talking of allocating extra money to the NEB when the Government have not even fixed the capital structure of the NEB, which has been in operation for 15 months?

Mr. Barnett

It is not at all odd. The hon. Gentleman may have noted that many sections of private industry frequently queue outside the doors of Ministers and the NEB for public money to help them in their problems. I imagine that that was one reason why the last Conservative Government introduced the 1972 Industry Act.

Mr. Watkinson

Is my right hon. Friend aware that Lord Ryder gave evidence to the Public Accounts Committee that the NEB was providing funds for smaller growth industries which the banking sector had failed to supply? Would not my right hon. Friend accept that that is an excellent reason for adding to the resources of the NEB?

Mr. Barnett

I agree with my hon. Friend, but at the moment there is no evidence that the NEB is short of funds for the type of investment to which he referred. Certainly it is doing an excellent job, especially to assist small enterprises.