Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 15th February 1972.

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Photo of Mr Jack Ashley Mr Jack Ashley , Stoke-on-Trent South 12:00 am, 15th February 1972

asked the Chancellor of the Exchequer what new steps he now proposes to take to improve the rate of investment.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

The Government have already taken considerable action to encourage investment, both directly and by stimulating demand.

Photo of Mr Jack Ashley Mr Jack Ashley , Stoke-on-Trent South

Leaving aside the Government's complacency, will the right hon. Gentleman agree that the Industrial Policy Group's statement about investment, which was highly discouraging, was both stupid and irresponsible at a time when we have a million unemployed? Can the right hon. Gentleman give the House his right hon. Friend's view of what the Government propose to do about overcoming the reluctance of British industrialists to invest at present?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

The authors of the Industrial Policy Group report have, as the hon. Gentleman knows, expressed doubt whether this country suffers from a shortage of investment at present. The Government and the leaders of the C.B.I. do not accept that view. The level of manufacturing investment in 1971 is likely to be higher than earlier estimates suggested. The revised estimates for the third quarter show a rise of 5 per cent. over the second quarter level.

My right hon. Friend the Chancellor of the Exchequer has made clear to the House the steps that he has taken to encourage investment. As for the rest, the hon. Gentleman will not expect me to anticipate my right hon. Friend's Budget.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

It is a pleasant change to hear my right hon. Friend sug- gest that things are getting better in investment for industry. However, that is not the general impression of those engaged in business. Will my right hon. Friend look at Questions Nos. 14 and 15 together, since it is the uncertainty about the value-added tax which plays a big part in keeping back investment?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

I do not accept that uncertainty about the value-added tax is the cause. If it were, that would be removed very shortly. It is true, however, that uncertainty over the inflationary situation has contributed to the reluctance to invest. If hon. Members want more investment and more prosperity for the nation, the House as a whole had better help the Government to keep down the rise in wages and prices.

Photo of Mr Dick Taverne Mr Dick Taverne , Lincoln

Is the right hon. Gentleman aware that the Government's total mismanagement of the present fuel crisis will postpone the pick-up of the economy and that the immediate-term and short-term outlook for unemployment will be even more depressing? Will the right hon. Gentleman recognise that even more vigorous action will be required than would have been the case before the fuel crisis?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

It is early to judge the effect of the miners' strike and how it will affect both confidence and investment. A great deal will depend upon the outcome of the Wilberforce Inquiry and when the miners return to work. If right hon. and hon. Gentlemen opposite wish to increase investment and to improve prosperity, I hope that they will bear this in mind and do what they can to encourage the end of the strike.