HC Deb 06 December 1979 vol 975 cc600-1

11. Mr. Straw asked the Chancellor of the Exchequer what policies he has for stimulating industrial investment in the United Kingdom.

Mr. Biffen

The prospects for industrial investment depend on reducing inflation, which undermines business confidence and adversely affects profitability. Overcoming inflation is the Government's first priority. We have also taken measures to improve financial rewards for enterprise.

Mr. Straw

As the Government's record has been one of increasing inflation, is it not the case that over the next two years we shall see increasing redundancies, the destruction of many sectors of our manufacturing industry, and a rising number of bankruptcies among small businesses? Does the Chief Secretary have any evidence to support his optimism about the future of the manufacturing sector in this country?

Mr. Biffen

I am not usually accused of being optimistic. There is no doubt, on the basis of most forecasts, including that from within the Treasury, that the next 12 months or so will be a period of at least mild recession. That is bound to take its toll.

Mr. Chapman

With the possible exception of increasing the tax depreciation on investment in industrial buildings, would my right hon. Friend accept that the greatest stimulus that could be given to industrial buildings would come about by minimising the bureaucracy on planning and the interpretation and application of building and other regulations? Would he have a word with his right hon. Friend the Secretary of State for the Environment about these important matters?

Mr. Biffen

I shall certainly draw my hon. Friend's question to the attention of my right hon. Friend.

Mr. Richard Wainwright

As the Chief Secretary points to more and more distant horizons for the achievement of his objectives, will he bear in mind that he stated in his White Paper for 1980–81 that one of his three central objectives was to restore incentives? In what way does he now expect to restore any incentives in 1980–81?

Mr. Biffen

By the emphasis in our policies on the virtues of price and profit.

Mr. Kilroy-Silk

How does the Chief Secretary square the statement made by his right hon. and learned Friend the Chancellor in the debate on his first Budget that he was creating an opportunity State with the fact that every single action of the Government has damaged employment prospects—and damaged them most seriously in the North-West and on Merseyside? When will the Government create the opportunities for my constituents to find work?

Mr. Biffen

I simply cannot accept the premise in the hon. Gentleman's question. If public spending were the premise for increased employment, the North-West should now be prospering