§ 4. Mr. Durantasked the Secretary of State for Industry whether he is satisfied with the present rates of return on capital employed in British industry.
Mr. Alan WilliamsThe Government have repeatedly recognised that industry should become more profitable.
§ Mr. DurantIs the Minister aware that in the first four years of this Government the return on capital was an average of 2 per cent., whereas the return on capital under the last four years of the Conservative Government was about 6 per cent.? Does not this prove that the mythical industrial strategy has failed?
Mr. WilliamsThe hon. Gentleman must turn his mind to the question that I posed to his right hon. and hon. Friends last week. If the industrial strategy has been a failure, why is investment so much higher now than when the Conservative Party was in office? Last year investment was 10 per cent. higher than in 1973 and 13 per cent. higher than in 1972. If investment by leasing is taken into account, last year investment was 19 per cent higher than in 1972 and 15 per cent. higher than in 1973.
§ Mr. Norman LamontDoes the Minister recall that just over 10 days ago the Prime Minister said that he would do everything possible to put the needs of industry first? The next day the Government raised minimum lending rate by one and a half points, at a time when industry is already suffering from strikes. The most important help that the Government could give to British industry would be to cut their spending and borrowing.
Mr. WilliamsThe hon. Gentleman will be aware that, as a result of what happened, the Government were able to make considerable placings of gilts last week. This reduced the money supply. If he is preaching to the Labour Party about the level of public sector borrowing, I should point out to him that, during the last year of the Conservative Government in 1973, the public sector borrowing requirement was running at 6.6 per cent. of the gross domestic product. Last year it was running at 5.3 per cent.