HC Deb 04 March 1969 vol 779 cc188-9
2. Mr. Maurice Macmillan

asked the Chancellor of the Exchequer what study he has made of the National Recovery Programme's recommendations on the balance of payments and invisible earnings, a copy of which has been sent to him; and what action he intends to take on these recommendations.

The Financial Secretary to the Treasury (Mr. Harold Lever)

I have seen this document, but I do not accept that there is anything in it which would cause us to modify present policies.

Mr. Macmillan

Would the hon. Gentleman consider at least modifying the policy of overseas investment, since more money goes out in interest, profit and dividends than comes in through new foreign capital invested here each year, while conversely the cost to the balance of payments of new British investment overseas is greatly exceeded by the interest, profits and dividends earned from part investment? Is he aware that over the last 10 years this has produced £4,172 million plus, on capital account, compared with £168 million minus on current account? Will he not realise that his present investment policy is damaging and not helping our balance of payments?

Mr. Speaker

Order. Longer questions mean fewer questions.

Mr. Lever

The Government do not discourage foreign investment, they merely require that a good deal of it should be undertaken by foreign borrowing in the interests of the reserves.

Mr. Turfon

Is not the important thing that this document, using official statistics, shows the fallacy in the Government's policy towards overseas investment?

Mr. Lever

Only if one made a false assumption about what is the Government's policy on overseas investment.

Mr. Dickens

Would my hon. Friend bear in mind that overseas investment has been a major factor in causing short-term deficits on the balance of payments in recent years? Will he confirm that it remains the Government's intention to retain all the existing restrictions on overseas investment and, perhaps, have a fresh look at the outflow of further capital to Australia?

Mr. Lever

The Government's intention is to continue their present policy of favouring overseas investment, but in ways which do not constitute an unwarrantable burden on the reserves.