HC Deb 22 December 1983 vol 51 cc558-9
15. Mr. Kenneth Carlisle

asked the Chancellor of the Exchequer whether he has any further evidence of a recovery in investment in the United Kingdom.

Mr. Lawson

Total investment in the first three quarters of this year is estimated to have been about 4.5 per cent. higher than in the same period last year. The December Department of Trade and Industry intentions survey points to a 7 per cent. increase in industrial investment next year, including a 9 per cent. increase in manufacturing investment.

Mr. Carlisle

That is an encouraging reply. Does my right hon. Friend agree that if that trend is to be consolidated in the new year, not only will profits have to continue to increase, but it will be essential that interest rates start to come down again?

Mr. Lawson

I share my hon. Friend's view about the importance to be attached to interest rates. That is one of the main reasons why the Government are so determined to keep public borrowing under control and to keep it falling as a proportion of GDP. One of the most encouraging aspects of this recovery, unlike previous recoveries, has been the sharp increase in company profitability.

Mr. J. Enoch Powell

Does not the reduced level of the United Kingdom's surplus on current account in 1983 indicate that less British capital was being exported in that year than previously?

Mr. Lawson

The right hon. Gentleman is correct. The balance of payments has to add up to zero overall. His assertion must follow as a logical necessity. However, the right hon. Gentleman will have noticed the recent sharp upward revision by the Central Statistical Office of its estimate of invisible earnings in the first nine months of this year, which makes it clear that the current account surplus this year will be significantly higher than was forecast in the Autumn Statement.

Mr. Terry Davis

If the Chancellor of the Exchequer is so certain that we are to see an economic recovery led by investment, will he tell us the industries in which that investment will take place?

Mr. Lawson

The one thing that I am certain about is that the recovery in the British economy is giving great cheer to the British people and causing great despondency among the official Opposition.