Payments in Addition to Advance Corporation Tax Due in Financial Year 1974.

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 17th July 1974.

Alert me about debates like this

Photo of Mr Robert Carr Mr Robert Carr , Sutton Carshalton 12:00 am, 17th July 1974

I am sorry now that I gave way to the Chancellor. I think that what he said just now was spurious nonsense. It was highly discourteous, not to me—that does not matter at all—but to the House as a whole. Had he been here—I should have thought that after the intervention he made last night he had some duty, out of courtesy to the House, if not a responsibility, to be here—he would have heard the reply I made. I do not think that I should bore the House or take up its time by repeating it.

Let me say just this to the right hon. Gentleman. What I said, which is a fact, was that he got the costs wrong last night by a decimal point. He multiplied by no less than 10 the effect of the amendments which we carried on this year's expenditure and this year's borrowing requirement. He must know that very well. I cannot believe that he does not.

I was complaining that I think that, as it so happens, the Chancellor's need to introduce an interim Budget so closely coincides—this need has been known for several weeks; it has not been kept secret—with the last stages of the passage of our annual Finance Bill that it would have been not only for the convenience of the House but for the proper conduct of our parliamentary system of government for the Chancellor to have made his interim statement this week so that we could have taken his new judgment into account in deciding how we should vote on this and other amendments to the various clauses in the Finance Bill. That applies perhaps more strongly to this clause than to any other.

If I had to give one overriding priority in the cause of protecting jobs in the future, of ensuring our capacity as a nation to maintain and sustain full employment and to raise the efficiency and the capacity of the nation's productive effort, on which our ability to maintain full employment depends, I would say that that priority at this moment in our history would be to do all we could to encourage a greater volume of high-quality investment in British manufacturing industry.

Our history over the post-war era—this is true if we go back considerably before the wartime era; it was true over most of this century—shows that there has been a noticeable tendency in Britain compared with other major industrial countries which are our chief competitors in world markets to invest on a smaller scale in modern productive equipment.

As every year has passed, the need to stimulate investment has become more and more urgent. This is not easy to do, as Governments of both parties have found since the war. Since the war Governments of both parties have tried various forms of tax incentive, both nationally and regionally. We have not found it at all easy to stimulate British industry into a level of investment comparable to that in other major industrial countries.

When we were in power from 1970 to the early part of this year we made renewed attempts to stimulate investment. We adopted various methods, chiefly by trying to put the need to expand the economy on a higher priority than any other post-war Government had done. It was difficult to start. It was much slower to start than we had hoped or indeed expected. However, finally by last summer there were very clear indications of a new investment surge in Britain. Then came the autumn, the oil crisis and the miners' dispute. It was, therefore, a very tender plant newly sprung up which needed most careful culturing. As I said in an earlier debate, instead of pouring fertiliser on the tender plant the Government in their Budget poured weed-killer on it.

If we are to have investment, although there may be all sorts of other conditions it is clear that two of the essential ones are that industry should have both cash and confidence. The Chancellor has taken away the cash and the Secretary of State for Industry is chief among Ministers in taking away industry's confidence.

In his Budget the Chancellor took no less than £1,100 million out of industry's cash flow in the current year. That was an enormous sum to remove from industry's liquidity in one year, in a year when we want to encourage and nurture the new growing plant of a surge in investment. The amendment would put £300 million of that £1,100 million back into industry's current liquidity.