§ 3. Mr. Jack Thompson
To ask the Chancellor of the Exchequer when he next expects to meet representatives of the CBI to discuss manufacturing investment.
§ The Chancellor of the Exchequer (Mr. Norman Lamont)
I meet representatives from the CBI from time to time to discuss a broad range of issues.
§ Mr. Thompson
In view of the CBI's projected figure for 1992 of a 4.4 per cent. fall in manufacturing investment, and of the 20 per cent. fall in 1991, is it not time that the Chancellor considered adopting the Labour party's policy on investment?
§ Mr. Lamont
I am grateful for that suggestion, but I am not sure which Labour party policy the hon. Gentleman is suggesting that I adopt to encourage investment.
One of the most important parts of investment is inward investment into this country, which is very much encouraged by our low rates of tax—by our low rates of corporation tax and by the fact that we have a low higher rate of income of tax. We all know what the Labour party will do to the higher rate, but even it does not seem to know what it will do to the tax on middle managers—national insurance contributions. If Labour Members want to encourage inward investment, they should come clean and clarify in their own minds what their plans for national insurance contributions are.
§ Sir Ian Stewart
As the future of manufacturing investment depends on confidence in future economic performance, does my right hon. Friend think that anyone contemplating what will happen to his income will feel more confident if he is threatened with slow torture rather than immediate amputation?
§ Mr. Lamont
My right hon. Friend is absolutely right. The Labour party talks all the time about investment, but the other side of investment is savings. There is no investment without savings. The Labour party's way of encouraging savings seem to be the ingenious one of putting extra taxes on it.
Mr. John Smith
Does the Chancellor appreciate the harm being done to the economy by the 20 per cent. fall in investment in manufacturing industry and the CBI's prediction of a further 4 per cent. fall? Bearing in mind that unemployment is rising yet again, and that 900 companies are going bust every week, when will the Government realise the depth of the recession that their policies have caused and do something to stimulate investment in our manufacturing industry?
§ Mr. Lamont
I note what the right hon. and learned Gentleman says about investment. As he knows, it has fallen from high levels. Business investment grew by 45 per cent. between 1986 and 1989. He will also know that manufacturing investment actually rose in the third quarter of last year. He will also know that, notwithstanding the CBI's prediction, the latest Central Statistical Office intention survey predicted a 2 per cent. increase in manufacturing investment this year.
The right hon. and learned Gentleman has advanced his idea of how to encourage manufacturing investment. He says that there should be an increased capital allowance for this year, cunningly saying that it would cost nothing in the first year; that is equivalent to saying that the bill is in the post, as we all know that it is paid after 12 months.