HC Deb 17 June 1982 vol 25 cc1074-7
7. Mr. Austin Mitchell

asked the Chancellor of the Exchequer if he anticipates an increase in the volume of investment in the current year.

14. Mr. Leighton

asked the Chancellor of the Exchequer what has been the volume of investment for each year since May 1979 at constant prices.

Sir Geoffrey Howe

I shall arrange for detailed figures for the volume of investment since May 1979 to be published in the Official Report. For 1982, the latest survey of investment intentions conducted by the Department of Industry suggested that there would be little change, compared with 1981, in the volume of investment in manufacturing industry, including leased assets. Investment in distribution and services should rise by some 4 per cent.

Mr. Mitchell

I am rather depressed by that news. Bearing in mind the heavy fall in investment in 1980 and 1981, does the Chancellor accept that there will have to be a massive surge of investment in manufacturing industry this year if we are to retain our manufacturing base? Given the Chancellor's increasing tendency to live in cloud-cuckoo-land and to lose touch with economic reality, will he tell us how he expects British industry to survive in a highly competitive world when investment in our manufacturing industry is being cut, in contrast to that of our competitors, who have always invested more than us?

Sir Geoffrey Howe

The hon. Gentleman seems not to realise that the latest investment intentions survey shows a recovery of investment in manufacturing this year, probably sufficient fully to offset the decline in 1981. An even stronger growth should be seen in 1983. I venture to suggest that one of the reasons for the growing confidence of investors in Britain's future is to be found in the declining prospects of the Labour Party.

Mr. Leighton

Is not that information rather worrying? Is not the lack of confidence and investment in British manufacturing industry a conclusive indictment of the Government's economic policy?

Sir Geoffrey Howe

I have explained to the House that the facts are exactly the opposite of what the hon. Gentleman says. The prospective recovery of investment in manufacturing this year should fully offset the decline last year and is likely to increase next year. Moreover, distributive and service sectors can look forward to 12.5 per cent. additional investment in the first half of this year compared with last year. We are planning a substantial increase of 26 per cent. in investment in nationalised industries. I repeat that the main reason for the growing confidence of investors in the future of the economy is their growing certainty about the decline in the prospects of the Labour Party.

Mr. Whitney

Will my right hon. and learned Friend assure the House that he will continue to treat with the utmost circumspection any request to increase even further than the figure that he has just announced the investment

£million in 1975 prices
General Government Public Corporations Private Sector Total
Q1 832 858 3368 5058
Q2 804 859 3537 5200
Q3 872 874 3543 5289
Q4 811 849 3750 5410

of public resources in those nationalised industries whose inefficiency continues to be such an obstacle to our national economic recovery?

Sir Geoffrey Howe

As I have already told the House, we are planning a substantial increase of 26 per cent. in investment in nationalised:industries. My hon. Friend correctly underlines the importance of ensuring that that investment is well managed and fully used by those who work with it.

Mr. Cook

Has the Chancellor seen the statistics released a fortnight ago by his Government's Department of Industry? Is he not aware that they show that in 1979—the year in which his party took office—investment in manufacturing industry was at its highest level for 10 years, and that in 1982, three years into the Government's period of office, investment is expected to be at its lowest level for 10 yeas? Does that not more adequately summarise industry's confidence in Government policies than any excuse that he can offer the House?

Sir Geoffrey Howe

If the hon. Gentleman had listened to what had said he would know that, for example, that in the first quarter of this year investment in manufacturing, distributive and service industries was up by 5 per cent. on last year. The decline has come to an end in manufacturing industry and there are prospects of an increase in investment in the year ahead. Moreover, investment in plan: and machinery in the first half of this year is up 8 per cent. on what it was in 1979.

Mr. McCrindle

In view of the many schemes for public investment being pressed upon the Chancellor, will he give the House his opinion of the attempts by such bodies as the British Airports Authority and British Rail to attract private investment? Is he generally approving of such approaches, or is the Treasury concerned at the lack of control over the investment that may ensue?

Sir Geoffrey Howe

My hon. Friend makes an important point. The report that was prepared last year by the Treasury and Civil Service Select Committee, and the two reports that were produced for the National Economic Development Council, drew attention to the scope for increasing private investment in nationalised industries, provided that the rewards of that investment are related to the risks undertaken and the success achieved, and provided that such investment does not cost more than it should. In that context it is important to be sure of the point made by my hon. Friend.

Following are the figures:

Data on the investment are produced on a quarterly rather than a monthly basis. The nearest data relating to complete years since May 1979 cover the periods end June 1979 to end June 1980 and end June 1980 to end June 1981. No figures for 1982 are yet available, so the corresponding information for 1981–82 cannot be provided. The available figures are as follows:

£million in 1975 prices
General Government Public Corporations Private Sector Total
Q1 763 879 3707 5349
Q2 752 921 3523 5196
Q3 726 869 3521 5116
Q4 690 831 3538 5059
Q1 614 800 3335 4749
Q2 533 861 3386 4780
Q3 450 774 3563 4787
Q4 457 788 3594 4839
1979 3300 3400 14200 20900
1980 2900 3500 14300 20700
1981 2100 3200 13900 19200
Mid 1979 to mid 1980 3200 3500 14500 21200
Mid 1980 to mid 1981 2600 3400 13800 19800
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