§ 4. Mr. Rost
asked the Chancellor of the Exchequer whether he will now consider a further relaxation in restrictions on overseas investment, particularly portfolio investment in the non-sterling area, in view of the strength of sterling, the reduction of overseas debt, the rebuilding of gold and dollar reserves and the balance of payments surplus.
§ Mr. Patrick Jenkin
I have nothing to add to what was said on these subjects by my right hon. Friend the Chancellor of the Exchequer in his Budget Statement on 21st March.—[Vol. 833, c. 1350–1.]
§ Mr. Rost
Does my hon. Friend agree that now is the time to consider relaxing 1251 further the restrictions on overseas investment, particularly the 25 per cent. surrender rule on investment in dollar stocks? Invisible earnings could be substantially increased by encouraging more portfolio investment in the dollar area and so cashing in on the profits that are to be made in overseas investment. If we are to prepare—[Hon. Members: "Too long".]—for Britain to give the financial leadership to the Common Market in London we should surely be considering this move now.
§ Mr. Jenkin
The invisibles have of course an enormously important part to play in the current balance and their contribution this year, as in the past, will be of great significance. On the question of the relaxation of the rules on overseas investment, my right hon. Friend had to have regard to the priorities and his first priority was to make changes in the direct investment field. I think that was the right answer.
§ Mr. Brian Walden
Before the Chief Secretary too enthusiastically accepts what his hon. Friend has put to him, will he bear in mind that given the present state of British industry we could do with a considerable degree of that investment here at home?
§ Mr. Jenkin
I think it is also equally true to point out that there are areas of investment for which there is no parallel in this country. It is important, in order to secure raw materials in export markets, that some investment should take place overseas.