§ 16. Mr. Ridleyasked the Chancellor of the Exchequer why he permits companies with overseas investments in the non-sterling area to plough back foreign exchange earnings, but refuses such facilities to companies without such investments.
§ Mr. TaverneIn general, overseas subsidiaries are allowed to retain a sufficient proportion of their net earnings, normally about a third, to finance their normal development. This arrangement cannot apply to companies without overseas subsidiaries.
§ Mr. RidleySurely we should allow overseas investments to be made in the most profitable field by those companies with the best prospects? It is quite anomalous to restrict overseas investments to those companies which have overseas earnings. Why do not the Government so set the price of foreign exchange that all may partake if it is worth their while?
§ Mr. TaverneThe Government are under a duty to protect the reserves, and they have regulated overseas investment in such a way that it is running at historically high levels but at the same time imposing the minimum burden on the reserves.