HC Deb 22 March 1982 vol 20 c683
23. Mr. Kenneth Carlisle

asked the Secretary of State for Industry what effect he expects the drop in oil prices to have on industrial production.

Mr. MacGregor

The recent fall in oil prices should reduce some costs and prices and lead to an increase in industrial activity.

Mr. Carlisle

Does my hon. Friend agree that the reduction in oil prices, when added to the recent reduction in the national insurance surcharge on business, will increase the amount of money available to industry? Should not some of the extra profits be used for investment so that extra production will be available when the upturn comes? Does my hon. Friend have any views on how the extra investment can be achieved?

Mr. MacGregor

My hon. Friend is correct about the impact of the lower oil prices. Each $1 reduction in the price of oil directly reduces manufacturing costs via reduced prices of oil-based fuels and feedstuffs by about £55 million in a full year. That is on top of the considerable improvement in industry's cash flow as a result of the reduction in the national insurance surcharge. A wide range of investment incentives exist in Britain. It is up to companies to take advantage of them.