§ 18. Mr. Clemitson
asked the Secretary of State for Industry if he is satisfied with the current level of investment in manufacturing industry.
Mr. Alan Williams
Manufacturing investment, excluding iron and steel, has increased considerably and encouragingly in the last 12 months.
§ Mr. Knox
Does the Minister realise that the restoration of confidence in manufacturing industry and an increase in the demand for its products have far more to contribute to increasing investment 1102 in manufacturing industry than schemes involving the direct use of Government money? When will the Government take steps to improve confidence in manufacturing industry and to increase the demand for its products?
It is this complete lack of understanding of what is taking place in the economy that amazes me every time I hear the Opposition on this subject. They never seem to learn. The fact is that last year investment in the private sector increased by 14 per cent. In real terms—and the increase was in real terms—the investment was higher last year than it was under the Conservative Government in 1972 and 1973. If the guide is the way in which investment increases, I wish to make clear that the plans for the machine tool industry in the current year envisage a higher rate of investment than for any of the last eight years—in other words, since the Labour Party was last in Government. In the non-ferrous foundry sector, there are plans that will give a two-fold increase over the rate of investment in the last four years.
§ Mr. Clemitson
While one agrees that we need more investment in industry, and while the latest figures are to be welcomed, will not the result of investment in industry often mean in the long run that there will be less employment in industry? Is it not essential therefore, if we are to reap the full benefits of increased investment in terms of increased wealth, to have, in parallel with the programme of increased investment, a programme of expanding job opportunities in the public service sector and the development of non-work alternatives for unemployment such as shorter working lives and greater educational opportunities?
These alternatives are matters to which the Government have been giving attention; hence many of the proposals that have come from the Department of Employment. My hon. Friend is right in saying that implicit in many of these sectoral schemes is the proposition that productivity must improve and that therefore extra output may be attained without necessarily providing massively extra employment, though under the schemes that have been put forward so far 22,000 extra jobs will be created. More importantly, because 1103 of the difference that the schemes will make to the balance of payments, they will enable the economy to be operated at a higher level and thereby indirectly create jobs.
§ Mr. Kenneth Clarke
Does not the Minister accept that there is no investor who is not willing and able to raise his money on the market for a project so long as he has confidence that he has markets for his products and a return on his investment? Does he not accept that it is the failure of the Government to create that atmosphere of confidence which makes his various sectoral schemes necessary?
My interpretation is different. My interpretation is that the level of investment under the Labour Administration is higher than it was under the Conservative Administration because business can see that we can run the economy better than can the Conservative Party. The Conservative Party should look at the facts. Under the industry schemes there has been E1.5 billion worth of new investment projects, and the Conservative Party is tonight to vote against more money for those very schemes.
§ Mr. Ioan Evans
If we are to have increased investment in manufacturing industry, will my right hon. Friend use the instruments of the National Enterprise Board and the Welsh and Scottish Development Agencies, which are doing a grand job in this respect? If we are to give huge funds to the industry, will the Government ensure that we get a share of the equity of those enterprises for the benefit of the people?
Where appropriate, equity participation is discussed with companies. My hon. Friend will see from forward projections of public expenditure that it is envisaged that the NEB and the Scottish and Welsh Development Agencies will continue to play a major role in the regeneration of industry.
§ Mr. Hordern
Is it part of the Government's industrial strategy that the Government should have to increase interest rates almost to record levels in order to attract funds to the Government to fund their borrowing requirement and away from industry, to which otherwise the funds would have gone?
It is shattering to find that, while the Conservative Front Bench seems to have no understanding of the domestic economy, those on the Conservative Back Benches have no understanding of the international economy. I should like to point to what has been happening to interest rates worldwide, particularly in relation to the United States. Perhaps when Conservative Members have done a little elementary homework they may understand what is happening.