§ 42. Mr. KennedyTo ask the Chancellor of the Duchy of Lancaster what is his estimate of the cost to manufacturing industry of the rise in base rates since April 1988; and if he will make a statement.
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§ Mr. AtkinsThe information requested is not available for manufacturing industry separately. The hon. Member should bear in mind, however, that a one percentage point increase in interest rates, even if sustained for a full year, costs companies far less than a one percentage point increase in pay settlements.
§ 61. Mr. McFallTo ask the Chancellor of the Duchy of Lancaster what is his latest estimate of the annual cost to industry of recent rises in interest rates.
§ Mr. AtkinsThe cost to industrial and commercial companies in the year to date of the changes in bank base rates, compared with the cost if they had remained the same as a year ago, is estimated to be about £0.8 billion. The hon. Member should bear in mind, however, that a one percentage point increase in interest rates, even if sustained for a full year, costs companies far less than a one percentage point increase in pay settlements.
§ 62. Mr. Allen McKayTo ask the Chancellor of the Duchy of Lancaster what representations he has received on the effects of current interest rates on industry.
§ Mr. AtkinsI have received a number of representations from business about the effects of interest rates on cash flow and investment. Investment intentions remain strong, however, and the representations show overwhelming support for firm action to curb inflation.