HC Deb 23 January 1978 vol 942 cc954-6
10. Mr. Canavan

asked the Secretary of State for Industry what is the latest estimate of the amount of industrial investment in 1977 in: (a) the public sector and (b) the private sector; and how these figures compare with the corresponding period in 1976.

Mr. Alan Williams

With permission, I will circulate the information in the Official Report.

Mr. Canavan

Does my right hon. Friend agree that the Labour Government should set an example in industrial regeneration by steadily increasing investment in the public sector of industry? Why, then, is it that in the latest public expenditure White Paper we have the proposal that between 1978 and 1982 there should be no growth in the budget of the National Enterprise Board and a decrease in the amount of spending by the Scottish and Welsh Development Agencies?

Mr. Williams

The figures are based on an analysis of what has been required in the past and on the finance available.

Mr. Alexander Fletcher

Will the right hon. Gentleman also publish in the Official Report the return on these investments in the public and private sectors? Does he accept that unless there is an adequate return no further jobs will be provided?

Mr. Williams

The hon. Gentleman will know that in instances of Government assistance in rescue cases an assurance of viability is sought. He will also know that the NEB, as with the Scottish and Welsh Development Agencies, is expected to make a commercial return on its investment.

Miss Maynard

Does not my right hon. Friend agree that unless we restore the public expenditure cuts, and indeed go further and put more money into public expenditure, we shall never be able to solve the unemployment problem?

Mr. Williams

Questions on general public expenditure levels should be directed to my right hon. Friend the Chancellor of the Exchequer. Up to June of last year an extra 100,000 jobs had been created in manufacturing as a result of the policy of giving assistance to industry.

Mr. Adley

Is not this "industrial investment" merely taxpayers' money? Should not this House decide, and make it clear when it makes its decision, that the investments are made in the expectation of there being a profit to the companies concerned—and, as a result, increased taxes—or are they merely a form of industrial social security?

Mr. Williams

I am at a loss to understand how the hon. Gentleman as a member of the party which abandoned investment grants in favour of a tax allowance system, can say that investment under his party's system was not taxpayers' money.

Mr. Gwilym Roberts

Does my right hon. Friend accept that, although there is a general need to stimulate investment in the public and private sectors, there is a particular need to stimulate investment in areas of high technology—[HON. MEMBERS: "Why?"]—where we can still maintain our lead over the semi-industrialised nations, such as Korea?

Mr. Williams

Despite the displays of incredible ignorance from the Opposition, I certainly endorse what my hon. Friend has said. This is one of the lessons that has come from the 40 sector working parties which have put forward proposals for industry schemes in those sectors where they felt that Government help was particularly relevant. Computers and electronics are cases in point, in which industries we face intense periods of development and overseas competition.

Sir K. Joseph

Now that the question of unemployment has been raised from the Government Benches, may I ask the right hon. Gentleman to take this opportunity to correct his hon. Friend the Member for Liverpool, Walton (Mr. Heffer) and to tell the House that on the Government's own figures—I take no joy in this; I state the fact—unemployment in this country is now significantly higher than it is in Germany, America or France—

Mr. Heffer

It is not true.

Sir K. Joseph

I am quoting the Government's own figures. Will the right hon. Gentleman confirm this? Will he also confirm that the higher unemployment is the direct result, in the view of many people, of hostility towards enterprise practised by the Government, particularly in their first years of office, under the influence of the part of the Labour Party to which the hon. Member for Walton belongs?

Mr. Williams

It is difficult to reconcile hostility to enterprise with the right hon. Gentleman's frequent complaint that we give too much money to profligate private industry. I point out that our hostility has taken the form of £1,300 million worth of Section 8 assistance, most of which has been opposed by Tory Members. The right hon. Gentleman says that he takes no joy in the unemployment level. May I also say that he takes no constructive attitude? Over the months we have not had a single constructive suggestion from the Opposition Front Bench on how more jobs can be created.

Following is the information: Total investment by manufacturing industry in 1977, including an estimate for the fourth quarter, is put at £1,775 million at 1970 prices, which is 7 per cent. greater than in 1976, and at £4,900 million at current prices, which is 24 per cent. higher than in 1976. Of the total of £3,957 million investment at current prices by manufacturing industry in 1976, £3,381 million was in the private sector, as given on page 130 of "National Income and Expenditure 1966–1976" (the National Income Blue Book). No split of the 1977 total between public and private sector investment is as yet available. However, excluding the iron and steel, shipbuilding and marine engineering and aerospace equipment industries where the public sector is dominant, investment at 1970 prices by the rest of manufacturing industry in the first three quarters of 1977 rose by 15 per cent. over the same period of 1976, compared with a rise of 6 per cent. for manufacturing as a whole.