Investment (Hansard, 10 April 1978)

§ 10. Mr. Knox
asked the Secretary of State for Industry what was the level of investment in manufacturing industry 957 during the most recent 12-month period for which figures are available.

§ 11. Mr. Canavan
asked the Secretary of State for Industry whether he will now take additional steps to increase investment in industry.

§ 12. Mr. Molloy
asked the Secretary of State for Industry how much Government money has been committed from 1974 to the present date under industry schemes and how much investment it has generated.

§ Mr. Cryer
Total investment by manufacturing industry in 1977 is estimated to have been £1,761 million at 1970 prices. It represents an increase of 8 per cent. over 1976. This is a welcome increase, but we intend to maintain our active support for industrial investment, in particular our wide range of selective assistance. By the beginning of March this year, a total of £247 million of assistance had been offered by my Department since 1st April 1974 through industry schemes operated under Section 8 of the Industry Act 1972. The total industrial investment associated with this assistance amounts to £1,528 million. Since 1st April 1974 to 31st October 1977, £276 million has been offered under Section 7 of the Industry Act 1972 to assist 2,894 projects with a total project cost of £2,865 million.

§ Mr. Knox
As investment in manufacturing industry is substantially lower in real terms now than it was in 1974 when the Government came to power, what is the Minister doing to restore confidence in manufacturing industry and to increase demand for its products, without which the higher level of investment will not take place?

§ Mr. Cryer
The level of investment in 1977—at 1970 prices—was £1,761 million compared with £1,730 million in the last full year of the Conservative Government. Therefore, the level of investment has actually increased under this Government compared with the last year of the Conservative Government.

§ Mr. Canavan
Will my hon. Friend increase investment in the public sector? Will he utterly reject the disastrous industrial policies of the political con men in the Conservative and Scottish National Parties who are trying to fool the people 958 of Garscadden with promises of more jobs, yet they themselves voted to destroy thousands of jobs in the West of Scotland by voting against public ownership and public investment in the aircraft and shipbuilding industries?

§ Mr. Cryer
Public investment in industry is an important element in maintaining the competitive position of this country's manufacturing and service industries. There will be a test later today to see whether hon. Members are prepared to vote money for investment in the public sector of British manufacturing industry.

§ Mr. Molloy
Is my hon. Friend aware that his original answer is very disappointing for the Tory Party? What is important is that this is encouraging for the gradually increasing momentum in overcoming inflation and all the economic ills that are afflicting us. While this sort of programme and progress is welcome to Labour Members, it is always bound to be disappointing to the Conservative Party.

§ Mr. Cryer
I am grateful for the accurate remarks of my hon. Friend. He is quite right in saying that the economy is improving under this Government. Of course, many difficulties remain, but the reduction in the level of inflation and the improvement in the balance of payments situation is important and is reflected in the higher level of investment under this Government.

§ Mr. Ridsdale
In order to expand investment in manufacturing industry, will the Minister ensure that there is no prejudice against sources from abroad? Will he underline the wise words of the Minister of State on his return from Japan, that we would do all we could to encourage investment in this country, from whatever source it might come?

§ Mr. Cryer
The policy of the Government is to encourage inward investment, as the hon. Gentleman says, from whatever source it may come.

§ Mr. Tebbit
South Africa?

§ Mr. Kilroy-Silk
Will my hon. Friend accept that when handouts of public money are given to private industry the public has a right to know not only the total amount but the actual firms to which that money is given? Will he also accept that when public money is invested 959 in private industry we ought to take an equity stake in those companies?

§ Mr. Cryer
As I remarked earlier, under the Industry Act 1972, which was introduced by the Conservative Government, the money was given in secrecy to companies. The Conservatives were the people who held the cloak of secrecy over the publication of figures. In July 1974 this Government determined to move towards a more open position. In fact, the figures over £10,000 and £25,000 in certain categories are now published after payment in the weekly publication Trade and Industry.

§ Mr. Richard Wainwright
Is the Minister able to confirm that the Government accept that, in order to achieve a higher level of investment in manufacturing industry, everything that can reasonably be done to improve the rate of return on capital ought to be encouraged?

§ Mr. Cryer
As I remarked before—perhaps the hon. Gentleman did not hear my remarks—this Government have made generous tax concessions for investment in plant and machinery. We also give generous concessions in stock appreciation relief, in addition to the actual cash grants which we give under national schemes of regional assistance. This is an encouraging framework for investment in new products and jobs in industry in this country.

§ Mr. Watkinson
Is my hon. Friend aware that when the chairman of the National Enterprise Board gave evidence to the Public Accounts Committee he pointed out that there was a gap in the private sector of investable funds for smaller firms? Can he ensure that more funds will be made available to the NEB to regenerate that particular aspect of our industry? Can he say whether he himself has any plans to encourage investment in smaller industries?

§ Mr. Cryer
My hon. Friend will be aware that tonight there is the possibility of a vote, which I am sure my hon. Friends will be keen enthusiastically to support as that will give further financial assistance to the NEB. We are currently having a look at the provision of financial assistance to small firms. As my hon. Friend knows, the Secretary of State for Employment announced on 15th March that the Department will shortly be extending the small firms subsidy for 26 weeks, 960 cash assistance. Therefore, an examination is under way as well as specific action which is being undertaken by the Government.

§ Mr. Kenneth Clarke
Will the Minister undertake to study again the supplementary question of my hon. Friend the Member for Leek (Mr. Knox), who showed that in real terms the figures are very disappointing and that they underline the failure of a policy which heavily over-relies on the direct investment of taxpayers' money by the Government? Does he not agree that what is needed to revive investment in British industry is better levels of profitability, better market prospects and confidence? None of those has been provided at any stage by this Government.

§ Mr. Cryer
I am not all that surprised at the propaganda from the hon. Member for Rushcliffe (Mr. Clarke), but if he finds the current figures disappointing he must have been even more disappointed at the record under his own Government, because in 1972 the figures were lower and in 1973 the figures of investment were extremely low. It ill behoves him to make these churlish remarks. Could not the Opposition, for a change, instead of conducting a continual propaganda campaign against the achievements of the Government and the country, try to assess the position of the country objectively and recognise the real achievements of this Government?