§ 15. Mr. Nellist
asked the Chancellor of the Exchequer when he expects investment in manufacturing industry to return to the level of 1979.
§ Mr. Nellist
As opposed to the Tory backwoodsman's comments earlier in Question Time, is not the real reason for the decline of the British manufacturing economy that manufacturing investment is less than 80 per cent. of what is necessary merely to cover the depreciation of the machinery that is being worn out? It is not workers who are to blame for the lack of competitiveness with Europe, Japan or America, but the Chancellor's friends in industry and in the banks who refuse to invest in Britain.
§ Mr. Moore
I know that the hon. Gentleman will not need to be reminded of the wise words of the Wilson committee, that lack of profitable opportunities is the main obstacle to investment. I know that the hon. Gentleman, revelling in good news, will be happy to know that manufacturing investment is strongly rising and is up by 11 per cent. in the six months to March.
§ Mr. Budgen
Will my hon. Friend confirm that, though there may be disadvantages for other sectors of the economy, manufacturing industry, particularly in the west midlands, will benefit from a lower sterling exchange rate and also from lower oil prices?
§ Mr. Bermingham
Does the Minister agree that the increase in bank rate must perforce affect the amount that industry can invest in new machinery and thus increase investment? Has not the time come for the Government to consider whether there should be differential interest rates, especially where investment is involved?
§ Mr. Moore
The hon. Gentleman should remember what my right hon. Friend the Chancellor said about the appalling levels of profitability when the Labour 1353 Government were in office. The increase in profitability of industry, combined with the increase in liquidity, ensures that the manufacturing sector, as well as other sectors of the economy, can bear the strain of the current higher interest rates.