On the assumptions made in this report it is clear that total fixed investment over the next few years on the scale envisaged by Departments would not be possible without diverting resources away from exports and immediate home consumption to an extent which we could not afford. If the decision were left to ordinary market forces, there could be no assurance that such a diversion would not occur. In any event the economy could ill afford the inflationary struggle which would take place in deciding between the claims of consumption and investment by competitive bidding for the available resources. For this reason some measure of control over both the volume and direction of investment will continue to be necessary throughout the period with which we are concerned.

The need for some control does not rest solely on these grounds. In the past both private industry and the State have tended to overexpand investment at certain times and to do too little at others, thus accentuating the peaks and depressions of the trade cycle. It is Government policy to try to prevent such violent swings of investment in the future, and in particular to influence the scale and timing of public capital expenditure with this in view. A supplementary reason, therefore, for holding back some forms of investment now may well be to have them in reserve in order that investment may be increased readily as soon as any signs of a trade recession appear.