HC Deb 27 February 1978 vol 945 cc19-21
7. Mr. Arnold

asked the Secretary of State for Industry whether he is now satisfied with the rate of investment in manufacturing industry.

Mr. Alan Williams

I am pleased that the trend in manufacturing industry's investment appears to be upwards.

Mr. Arnold

Is it the case that the figure for 1977 was extremely disappointing? There was a rise of 7 per cent. compared with the Government's characteristically over-optimistic forecast of 15 per cent. to 20 per cent. How can the situation possibly improve until real rates of return on capital investment show a dramatic increase?

Mr. Williams

The hon. Gentleman has the figures wrong. The increase was 6 per cent. If one deducts from that figure the iron and steel industry figures and makes comparisons with the past, the increase was 12 per cent. In the private sector alone the increase was 15 per cent., which is very encouraging. The hon. Gentleman shakes his head in sheer disappointment. I should point out to him that last year's figures represent an improvement over two of the three full years during which the Opposition were in office.

Mr. Mike Thomas

Is my right hon. Friend aware of the way in which the decline in industrial investment has affected the steel industry? Will he con firm that the Second Report of the Select Committee on Nationalised Industries specifically did not advocate the sort of precipitate action which the Secretary of State today has quite rightly criticised the Conservative Party for advocating? Is he further aware that my hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) alleged on Thursday or Friday of last week that the Select Committee had included inconsistencies, inaccuracies and invention in its report to the House? Will he ask his hon. Friend to place in the Official Report detailed documentation of such inaccuracies, inconsistencies and invention because, as a member of the Select Committee, I must say that while I accept—

Mr. Speaker

Order. This is no time for argument. The hon. Member must ask a question.

Mr. Thomas

I beg your pardon, Mr. Speaker.

Mr. Speaker

The hon. Gentleman has asked two questions. He may ask a third quickly.

Mr. Thomas

If there is invention, will my right hon. Friend ask the Minister of State to make a statement on the whole question?

Mr. Williams

My hon. Friend and the Government will reply in the normal way to the Select Committee's report. I suggest that instead of my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) generating so much heat he should wait until such a reasoned reply is available.

My hon. Friend is absolutely correct on the investment position. It is inevitable that a world recession will have a drastic effect on the fortunes of steel in this country, as it has had throughout the Western world.

Mr. Kenneth Clarke

Has the Minister had the chance to study the work published this morning by the research panel of the Wilson Committee on investment in British industry? It says that lack of investment has nothing to do with lack of finance or the availability of Government grants and that the problem is a low level of profitability, uncertainties about demand, trade union resistance to change, lack of management incentive and shortage of skilled labour. Will the Government, therefore, tackle these matters and abandon the policy of grant and subsidy and set about creating a proper climate for investment?

Mr. Williams

I have not had time to study fully the report that is in this morning's Press. However, I was struck, as I indicated earlier, by the remarkable fact that, despite the list of miseries paraded by the hon. Gentleman in supplementary questions, he has still not turned his thoughts to the fact that in two of the three full years in which the Conservative Party was in office the level of investment was lower than it was last year when the Labour Party was in office, despite the fact that we are in a world recession.