HL Deb 21 February 1967 vol 280 cc603-4

2.35 p.m.

LORD INGLEWOOD

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government by what percentage they expect industrial investment to fall in 1967 compared with the previous year.]

THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON)

My Lords, forecasts provided by manufacturers at the end of last year indicated that investment in 1967 will be about 10 per cent. lower than in 1966. We see no reason to dissent from this forecast. We hope, however, that with the recent increase in investment grants and the reduction in interest rates, the outcome for 1967 will be better than forecast.

LORD INGLEWOOD

My Lords, while thanking the noble Lord for that reply, which appears to mean that he supports the President of the Board of Trade rather than the Prime Minister—for they have been saying different things about this matter—might I ask one supplementary question? Does he think that a fall in industrial investment of the nature of 10 per cent. is a very good foundation on which to base increased estimates of 8½ per cent. (such as were published the other day) without heavy increases in taxation.

LORD WALSTON

My Lords, that is a long and complicated question to answer. It is largely a second question that the noble Lord has asked. But I would point out that there is a general cycle in investment, and the fact that this year, 1967, will probably show a decline of the order I have mentioned in industrial investment is by no means unusual. If the noble Lord will refer to the investment cycle over the last 10 years he will find that there have been these ups-and-downs and periods of readjustment, and it would be entirely wrong to expect that because investment is falling the total output necessarily will also fall pari passu.

LORD INGLEWOOD

My Lords, can the noble Lord lead us to hope that there is going to be a taxation cycle and that under a Socialist Government taxation may go down as well as go up?

LORD MOLSON

My Lords, were we not led to suppose that under the new Government there would be an end to "Stop—Go"which they criticised in previous years?

LORD WALSTON

My Lords, we were certainly led to expect that. I think that what has happened during the last two years and what is projected bears out that hope.

LORD DRUMALBYN

My Lords, will the Government bear continuously in mind that the only way to maintain investment in the future is to ensure that long-term investment is encouraged by the prospect of remuneration for that investment?

LORD WALSTON

Yes, my Lords; we constantly hear that in mind.

LORD REA

My Lords, would the noble Lord not agree that, as a matter of policy, it is better to have "Stop—Go" than "Go—Stop"?

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