Public Investment

Part of the debate – in the House of Commons at 12:00 am on 9th November 1960.

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Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury 12:00 am, 9th November 1960

The hon. Member for Glasgow, Craigton (Mr. Millan) questioned very much the efficacy of altering public investment to suit any particular crisis in our financial day-to-day affairs. I agree that it does not seem likely that we can affect the situation anything like quickly enough, but surely, as it says in the White Paper, the Government themselves have come to the conclusion that that is not an effective means of dealing with a temporary difficulty in the financial situation, and are rejecting it on that ground. It is a peculiar suggestion that to freeze the level of public expenditure for next year at the level at which it is running this year could in any way affect the extra demand on the economy this year.

The main theme which runs through this debate about which the hon. Member for Glasgow, Craigton made a comment is whether profitability should be the main consideration in investment in nationalised industry. I think we could compromise on the two views which have been expressed, by saying that profitability must be the main consideration but that where there is a social need for some form of activity, for instance to provide employment, then that should surely come under the same rules as are envisaged by the Local Employment Act.

For instance, if we wished to move an oil refinery to some part of the country where the oil company did not wish it, the Government should be obliged to find the difference between the economic cost and the actual cost, under the terms of the Local Employment Act. That, surely, could be applied in many cases to nationalised industries of all sorts.