Private Sector Investment

HC Deb 14 June 1984 vol 61 cc1062-3

13. Mr. Kenneth Carlisle

asked the Chancellor of the Exchequer what recent information he has about the level of investment by the private sector.

Mr. Peter Rees

The estimated level of business investment for the six months ended March 1984 was 7½ per cent. higher than in the corresponding period a year earlier.

Mr. Carlisle

Does my right hon. and learned Friend accept that those very encouraging figures for investment in industry at last show that the recovery from the recession is strong and is no longer based on a consumer boom? To maintain that progress, is it not essential that industry's costs should be strictly controlled?

Mr. Rees

I entirely agree that the recovery is very strongly based. Nevertheless, I should emphasise that its continuance must be founded on the containment of unit costs and improved business profitability. That should lead to increased investment, and so, ultimately, to more jobs.

Mr. Holt

Does my right hon. and learned Friend agree that although private sector investment is important, we should also ensure that public investment is kept up, particularly in the steel industry, as, thanks to the realism of the work force, the leadership of Mr. MacGregor, and the efficiency of management, we now have a public corporation which is creating world markets which the industry has never before enjoyed?

Mr. Rees

I certainly applaud the steel industry's efforts and pay tribute to the investment made in it, which is, of course, matched by Government investment in various other public sector enterprises, including the National Coal Board.

Mr. Terry Davis

If the Chief Secretary is so confident about the strength of the recovery in private investment, can he say whether this year the level of investment will return to what it was in 1979?

Mr. Rees

I will tell the House that the latest investment intention survey, conducted by the Department of Trade and Industry——

Dr. McDonald

Answer the question. That is not what was asked.

Mr. Rees

The hon. Lady evidently wishes to answer for me. However, the investment intention survey points to a 12 per cent. increase in manufacturing investment in 1984, with an 8 per cent. increase by construction, distribution and service industries. Perhaps the hon. Lady would care to cap that.