HC Deb 27 October 1988 vol 139 cc439-40
2. Mr. Hunter

To ask the Chancellor of the Exchequer what are the latest figures for the growth of manufacturing investment.

The Chief Secretary to the Treasury (Mr. John Major)

In the second quarter of this year the level of manufacturing investment, at constant prices, was at its highest ever level in real terms.

Mr. Hunter

In the light of that most welcome answer, will my right hon. Friend confirm that, despite what Opposition Members would have us believe, investment in manufacturing industry this year is likely to exceed that achieved in any year under the last Labour Government?

Mr. Major

I certainly confirm my hon. Friend's point. The DTI investment intentions survey projects 16 per cent. growth in manufacturing investment this year and further significant investment next year.

Mr. Henderson

What effect does the Minister believe ever-escalating interest rates will have on manufacturing investment in the first six months of next year?

Mr. Major

The principal threat to investment next year, or at any other time, is inflation. Interest rates and my right hon. Friend's present policy are intended to curb inflation.

Mrs. Peacock

Does my right hon. Friend agree that investment in manufacturing in areas of Yorkshire and Humberside is at an all-time high and that such areas are seeing new factories being built on a scale that they have not seen for centuries?

Mr. Major

My hon. Friend is correct. The growth in manufacturing in each and every region of the country is exceedingly good at present, and we hope and expect that it will continue.

Dr. Marek

For the period 1979 to 1988, does the Chief Secretary know of any country with a worse record in investment in manufacturing than the United Kingdom? If he cannot think of one now, perhaps he will write to me later and I shall give it all the publicity that it deserves. Will the right hon. Gentleman arrange for another of his Back Benchers to ask the same question in a year's time? Will he be telling us then that the rate of manufacturing investment for the last quarter is just another of the Chancellor's blips?

Mr. Major

The hon. Gentleman clearly has a one-eyed sense on this matter, because productivity, profits and investments are up, and unemployment is down, especially in manufacturing industry. The reality is that the outturn of manufacturing investment this year is on course to be the highest since records were first kept.

Mr. Cran

Does my right hon. Friend accept that manufacturing in Humberside is hale and hearty, as is evidenced by the fact that unemployment has fallen by 30 per cent. in Beverley during the past year, and that there is now a shortage of factory space?

Mr. Major

My hon. Friend is quite right about the success of manufacturing. Profits are the best incentive for further investment, and profits are rising.