HC Deb 17 June 1993 vol 226 cc977-9
2. Mrs. Anne Campbell

To ask the Chancellor of the Exchequer if he will make a statement on the relationship between the Budget measures for investment and unemployment levels.

The Financial Secretary to the Treasury (Mr. Stephen Dorrell)

The Budget measures for business have been warmly welcomed by the business community. They provide an excellent environment for investment and job creation.

Mrs. Campbell

Given that the CBI's industrial trends survey shows that manufacturing firms are still cutting investment, will the Minister tell us what specific steps he will take to promote investment—especially in areas affected by coal pit closures, defence cuts and local authority capping?

Mr. Dorrell

In a week in which the Central Statistical Office has announced that manufacturing output is now rising at an annual rate of 5 per cent.—the House may be interested to learn that it fell by exactly the same amount when Labour was in power between 1974 and 1979—I do not feel disposed to take any lectures from Labour about how to create an environment in which businesses expand and jobs can be created.

The hon. Lady asked what measures had been introduced to promote business investment. Let me list the measures introduced in the Budget and the autumn statement, which have been welcomed by the business community. In those statements, the previous Chancellor increased the amount of export credit available, provided a £2 billion cash flow benefit to British industry through the advance corporation tax changes, abolished car tax, introduced capital allowances and put extra money into the housing market through changes in the housing associations and in the capital receipts regulations for local authorities.

Mr. John Greenway

My hon. Friend the Financial Secretary omitted from that list the £150 million leasing deal for new railway rolling stock, which was announced in the autumn statement and which is much needed to help preserve jobs in the train-making factory in York. Does he agree that the sooner we establish the leasing market for new trains, the sooner more of those who have been made redundant in York and other places can be put back to work? Would it not help that process if the Labour party dropped its objections to the Railways Bill?

Mr. Dorrell

My hon. Friend is absolutely right. The measure to which he refers reflects not only the Government's commitment to investment in railway rolling stock, which my hon. Friend is right to welcome, but, more importantly, the Government's commitment to improving the service available on British railways through the changes to be introduced in the Railways Bill.

Mr. Robert Hughes

Does not the Financial Secretary understand that the minuscule changes to the petroleum revenue tax announced in the Budget will do nothing to safeguard jobs in the oil industry? Is he aware that only yesterday the Association of Offshore Diving Contractors made it clear that there are likely to be about 21,000 job loses? How can he say that he is trying to deal with investment and improve business when he carries out that sort of action which produces high unemployment?

Mr. Dorrell

The hon. Gentleman's dismissive attitude to the changes that we annnounced yesterday is not reflected by Brindex, which made proposals very similar to those that we announced. As the House knows, the fundamental reason why we are changing the PRT system is that we do not believe that among the many calls on public resources which my right hon. Friend the Chief Secretary has to balance we should number subsidising the international oil industry.

Mrs. Peacock

Is my hon. Friend aware that many Yorkshire companies have been investing in new jobs, new factories and new manufacturing processes over the past nine years and that many have continued throughout the recession to invest their own money, not borrowed money? Perhaps he might persuade his colleague, the President of the Board of Trade, to come and look at some of that investment.

Mr. Dorrell

I am sure that my right hon. Friend the President of the Board of Trade is capable of being responsible for his own travel arrangements. If he were to travel to Yorkshire, he would find, as my hon. Friend rightly points out, that British industry is benefiting from the more stable environment that has been created over the past two years as a result of lower inflation, lower interest rates, a more competitive exchange rate and the opportunity for British industry to expand, which the indicators show is now being taken.