Oral Answers to Questions

William Bain Excerpts

Thursday 8th July 2010 Commons Chamber

[Mr William Bain (Glasgow North East) (Lab)]

4. What recent assessment he has made of trends in levels of investment by manufacturing industry; and if he will make a statement.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

In 2009, the volume of manufacturing investment in the UK declined by 21%, the largest annual fall on record, and it declined in 10 of the last 11 years. This Government believe that that trend can be reversed. In developing our plans to rebalance the economy, we are keen to ensure that we provide the best long-term environment in which manufacturing can grow.

[Mr Bain]

I am grateful to the Minister for that reply, but will he reflect on the comments from the Institute for Fiscal Studies and the manufacturers’ organisation the Engineering Employers Federation that the biggest beneficiaries of the Government’s changes to capital and investment allowances and corporation tax are low-investment and high-profit firms—

“Banks and supermarkets rather than manufacturers”,

as the IFS put it? What practical help can the Minister offer to manufacturing industry today?

[Mr Prisk]

I must correct the hon. Gentleman and give him the facts. We have had to reduce capital allowances to enable us to fund the corporate tax cuts, but the net result of the changes is that manufacturing—and not the industries to which he referred—will still be better off. Indeed, by 2014-15, it will be better off by £250 million per annum. I think that that is a very good policy, although I detect that the Labour party may now be opposed to it.