Wales (Trade and Industry)

Part of the debate – in the House of Commons at 12:00 am on 14 November 1966.

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Photo of Mr David Gibson-Watt Mr David Gibson-Watt , Hereford 12:00, 14 November 1966

I take the right hon. Gentleman's point on dereliction. I thought that he was speaking in a general way, and I withdraw what I said.

But I would say that Governments of all colours have tried to deal with this question of redeployment, and one of the factors here is the location of industry. This is clearly something that vitally affects every hon. Member. There is hardly an hon. Member in the House today who has a constituency in the valleys who is not faced, first, by the short-term question of bringing in immediate employment, and, secondly, by the long-term question of where the best place is to put these industries.

Very often the short-term and the long-term can be in conflict. Here again, a major difficulty which industry faces—leaving aside all the figures which the right hon. Gentleman gave today about advance factories and I.D.C.s—the one fundamental thing which the industry in Wales, as in other places, faces, is the level of private investment.

The Chancellor, indeed the Prime Minister, has been asking for higher private investment, but that is not easy under a Socialist Government. For two years we have had a Government who have been openly anti-private enterprise and have treated profits as something with a bad smell. [HON. MEMBERS: "NO."] When we have a party which, over the years, has run down the profit motive we cannot be surprised that there is a rundown in private investment. This is something which has to be got over. If, during the course of getting over it, we change the philosophy of the party opposite, at least something will have been achieved.

I now deal with some financial matters. If we leave on one side restriction of credit and speak of Corporation Tax, Selective Employment Tax and 10 per cent. Surtax, we realise that these are some of the things which are discouraging investment. Hon. Members opposite often make noises against the Surtax payer, but in many cases Surtax payers are the men and women who can start industries and help to diversify industry. They need encouragement. They should not be continually discouraged by crippling taxation.

Today, the financial climate in which businessmen are hesitant to launch out on new ventures is something we have to get rid of. It is a situation which has been created by the financial policies of the party opposite and is described by the Prime Minister as "a period of shake-out". I ask the right hon. Gentleman and his colleagues in the Government how long they intend deliberately to keep high levels of unemployment which result from lack of investment resulting from the failure of their economic policies.

Until the Government recognise that through their financial policies they should encourage enterprise, we shall not see the situation improve. The Government may argue that they are bringing to Wales a great deal of public expenditure, but this is only half the answer. Although it may bring employment, so much public expenditure does not of itself make a direct contribution to exports.

I come to the question of Selective Employment Tax.