As regards the private sector, our general approach must be to establish an economic framework within which companies themselves have both the ability and the will to mobilise the resources available for investment. I hope this Budget will help in securing that framework. But in addition I believe that there is a need for the selective use of public funds to stimulate investment and growth in particular sectors of private industry. The National Enterprise Board and Planning Agreements will soon provide us with new instruments for helping to raise the level of industrial investment. In Scotland and Wales the new Development Agencies will have similar tasks as part of their functions.
Meanwhile, we intend to make full use of the powers of selective assistance under the Industry Act to prime the pump for 292 viable investment projects. We know that there are cases where major investment projects have been planned but shelved for the time being. I have decided that. to help in building up our productive capacity in ways that will assist the balance of payments, special assistance will be provided to encourage selected schemes of this kind to go ahead, provided that construction or installation work is begun before the end of March 1976. This will thus be a temporary measure. Priority will be given to projects which can be put into operation quickly.
In addition, we intend, in consultation with management and unions, to introduce further schemes like the one which is already in operation for wool textiles, designed to assist certain industries as a whole to modernise and rationalise. We intend to introduce such a scheme for the ferrous foundry industry on which preliminary discussions are being held with the Economic Development Committee. This is a good example of basic industry which it is essential to modernise.
I have decided that a sum of £100 million should provisionally be allocated for these two purposes. Assistance on this scale should generate additional investment by industry of £500 million to £600 million. That is investment which otherwise would not have taken place.
I have also decided to introduce a series of measures to encourage the shift of resources into the balance of payments. To facilitate the provision of working capital for exports, ECGD will provide facilities to guarantee loans for pre-shipment finance on large export projects. The details are to be announced in the next few days. This is in addition to the cost-escalation scheme announced by my right hon. Friend the Secretary of State for Trade last month.
My right hon. Friend the Secretary of State for Prices will also propose some further amendments to the Price Code to assist the liquidity of companies which are exporting, and to support investment. The scope of the investment relief in the Price Code will be extended to cover investment for exporting, and my right hon. Friend will take power to give some relief from the controls in certain specific circumstances where this would assist 293 the balance of payments. It is also proposed to increase the rate of the investment relief from 17½ per cent. to 20 per cent. and to extend it to cover commercial vehicles. My right hon. Friend will be issuing a consultative document about these changes tomorrow morning.
In addition to these measures, it is important that we should do all we can to economise on imports, and I hope that all those who are concerned with imports, including the providers of credit, will have our balance of payments position always in their minds.
We are just as concerned to get the best use of resources in agriculture as in industry. World prices of many of our food imports have risen steeply in the last two or three years, representing a heavy extra burden on our balance of payments. My right hon. Friend the Minister of Agriculture is about to publish a White Paper which considers future world price prospects and policies for food production from our own resources. This concludes, on the basis of the best judgement we can at present make about the likely future level of world prices, that they will call for a continuing increase in the output of our own agriculture over the next five years; and it will he our aim to achieve this.
This package of micro-economic measures will make a real contribution towards ensuring that industry does in fact take advantage of the opportunity presented to it by our macro-economic measures. The key to improvement in our economic performance lies in this area. Macro-economic strategy, as has been seen so many times in the past, can lead the horse to the water, but it cannot make him drink.
These measures will help exports, but it may be convenient if I mention here the steps I propose to take to end a particuar drain on our balance of payments. I refer to the cost in foreign exchange of gold coins coming in from abroad, the vast majority having no value other than their content of the metal. This particular operation developed rapidly in the middle of 1974 and appeared to he part of an international wave of renewed speculation in gold. I refrained from applying restrictions last autumn, when there seemed to be a real chance that the fashion would die down and, in particu- 294 lar, that the prospective relaxation in the United States on private gold holding would reverse the trend. This has not happened, however, and the time has come to stop this drain, which has amounted to on average £25 million a month in the first quarter of this year.
The problem must be tackled in two ways, aimed to prevent further speculation and hoarding. First, the exchange controls have been tightened under a statutory instrument being laid today. These provide that gold coins minted after 1837 can no longer be bought from non-residents except by authorised dealers, who can sell only to non-residents. Secondly, my right hon. Friend the Secretary of State for Trade has made the import of gold coins subject to individual licensing. The import restrictions will come into force from midnight tonight. The new exchange control rules are effective at once. Details are in a Treasury Press notice; and a revised Exchange Control notice will be available tomorrow.
We must include gold medallions and the like within the scope of the controls to prevent the obvious risk of speculators concentrating on these items, which have also been exempted since 1971. The new arrangements do not, however, impose any restriction on holding gold coins already here, so coin collectors need not register or obtain permits as they had to when gold coins were controlled before.