HC Deb 04 May 1965 vol 711 cc1091-2
14. Mr. Wingfield Digby

asked the Chancellor of the Exchequer what increase or decrease he anticipates in foreign investment in the United Kingdom over the next year.

Mr. Callaghan

I expect an increase in such investment.

Mr. Digby

Cannot the Chancellor indicate how far the present trend—last year, I think, the increase was 12 per cent.—will be continued and how far his Budget proposals will reduce the increase which he would otherwise have?

Mr. Callaghan

As regards the second part of that question, the hon. Member obviously still does not understand that the Corporation Tax will have the effect of increasing the attraction of foreign investment in this country. [HON. MEMBERS: "Oh."] I am sure that in the course of our debates hon. Members opposite will learn a few things about this tax. As regards the first part of the question, I do not think that it is possible to make an estimate, but certainly I would expect to see foreign private investment in this country rather higher this year than it was last year, because we are getting our balance of payments under control.

Mr. Ridsdale

With the advantage of hindsight, would not the Chancellor agree that he caused a loss of foreign investment in this country by blowing up a financial crisis which was not there?

Mr. Callaghan

No. Foreign investment statistics extend over a period of 12 months and, unfortunately, because of the growing deficit that existed in this country during the 12 months of 1964, foreign private investment, particularly portfolio investment, was not at the level at which I expect to see it this year.