§ 2. Mr. Wareing
To ask the Chancellor of the Exchequer what plans he has to introduce further tax relief incentives for United Kingdom-based manufacturing firms investing in the United Kingdom.
§ The Paymaster General (Sir John Cope)
The existing tax relief for capital investment allows appropriate write-offs. The measures announced in the autumn statement will give additional encouragement to investment in the year to October 1993.
§ Mr. Wareing
Is the Minister aware that between 1987 and 30 June this year, no fewer than 24,725 manufacturing concerns went into liquidation? What could the Government have done? Does the right hon. Gentleman believe that they could have done anything to prevent those bankruptcies? Is he aware that, although reductions in interest rates are welcome, confidence is needed? Until unemployment is reduced, there will be no confidence, no demand and no inducement to invest.
§ Sir John Cope
Measures were introduced by my right hon. Friend the Chancellor in the autumn statement to deal with those problems. The measures were widely welcomed and, on investment and other matters, responded to the calls made by industry.
§ Mr. Bill Walker
My right hon. Friend will be aware that one of the finest industries in Scotland is the Scotch whisky industry, which contributes massively to the Exchequer through excise duties and value added tax and produces more than £1,700 million worth of exports a year. Will my right hon. Friend give serious consideration to the proposal that, rather than the present system, excise duty should be levied on the alcoholic content of the product? That would help negotiations in Europe, increase revenue intake for the Treasury and give substantial help to the Scotch whisky industry.
§ Sir John Cope
I am, indeed, aware of the importance of the Scotch whisky industry, from what my hon. Friend and other hon. Members have told me about it, from what I have been told by the Scotch Whisky Association and from my own appreciation of it. I note my hon. Friend's comments and assure him that we consider everything carefully in the approach to the Budget, but I could not possibly anticipate my right hon. Friend's Budget statement. My hon. Friend will also be aware of the disadvantages, from our point of view, of the system he suggests.
§ Ms. Harman
Is the right hon. Gentleman not concerned by the fact that his Department's monthly monetary report, issued today, shows that manufacturing employment fell in September by 32,000 and that the rate 981 of job loss in manufacturing is accelerating? Is it not time that the Government recognised that unemployment is not just, as they call it, a lagging indicator but is now in itself a cause of the continuing recession, which is why the Government must take action on unemployment?
§ Sir John Cope
The proportion of output from manufacturing has been declining for a long time not just in this country but far more widely. Investment in plant and machinery, which is part of what is needed, is already increasing and productivity is at a record level. That is what we need and what the autumn statement encouraged.