§ The Secretary of State for Industry (Mr. Patrick Jenkin)
Meetings of the National Economic Development Council are normally chaired by my right hon. and learned Friend the Chancellor of the Exchequer. Investment features regularly in NEDC discussions and may well come up at the next meeting in March.
§ Mr. Dykes
I thank my right hon. Friend for that answer. Although the existence of a deficit on the corporate account capital account of companies has been 2 a feature for 10 years or more and has somewhat disguised the insufficiency of investment in certain key sectors, what steps might be taken within the NEDC, in conjunction with conversations with the banks, to determine which sectors might benefit from more new investment capital in the future to get growth again?
§ Mr. Jenkin
There is no evidence of a shortage of capital. Investment depends crucially on profitability and, as the Confederation of British Industry pointed out at the January National Economic Development Council meeting, profits of industrial and commercial companies, excluding North sea oil, fell from around 10 per cent. in the years up to 1973–74 to below 3 per cent. in 1980–81 and have recovered only to around 4 per cent. in the current year. Future investment depends crucially on rebuilding the profits of industry.
§ Mr. John Grant
Has the Secretary of State examined what last week's OECD report said about investment? Will he throw off the Chancellor's shackles and stand up for British industry and for the unemployed? With regard to that report in particular, does he agree with it that we need more public sector investment, that industry needs more help with its costs and that these things should take priority over pre-election tax bribes?
§ Mr. Jenkin
This question is about industrial investment, not about public sector investment. I am bound to tell the hon. Gentleman, however, that the absolute precondition for restoring the prosperity of this country has been the fall in inflation. [HON. MEMBERS: "Hear, hear."] I hope that the hon. Gentleman cheers as loudly as anyone else the fact that inflation is now below 5 per cent.