HC Deb 26 November 1987 vol 123 cc368-9
8. Mr. Carrington

To ask the Chancellor of the Exchequer what is his latest estimate of net United Kingdom asset overseas; and how this compares with the position in other major countries.

Mr. Norman Lamont

The level of United Kingdom net overseas assets at the end of 1986 was £114 billion, second only to Japan.

Mr. Carrington

Is it not significant that the level of our overseas investment, at 29 per cent, of gross domestic product, is the highest of any country in the world by that measure? That is a significant tribute to the lifting of exchange controls by the Government and the prudent investment of our North sea assets. As a consequence, our earnings from overseas investments in the past year were running at £5.2 billion. That is a great tribute and a great asset to our invisible earnings, which, themselves, are a great tribute to the country's overseas investment and the earnings of the financial sector.

Mr. Lamont

My hon. Friend is absolutely right. The figures that he quoted for earnings to the economy show that the benefits of North sea oil have been converted into a permanent gain for the economy.

Mr. Holland

Is it not a fact that the hon. Member for Fulham (Mr. Carrington) is entirely wrong and that the scale of our foreign investment substitutes for export trade? Is that not one of the underlying reasons for our low export performance in manufacturing, and are we not investing in the industrial modernisation of our competitors to our detriment?

Mr. Lamont

I do not think that that is correct, and I do not think that many people share the hon. Gentleman's opinion. As my hon. Friend the Member for Fulham (Mr. Carrington) said, we now have substantial earnings each year in excess of £5 billion, and that is of enormous importance and benefit.

Mr. Curry

Does my right hon. Friend agree that the fact that we have such substanital earnings from invisibles means that any deficit on visible trade has nowhere near the importance that the hon. Member for Vauxhall (Mr. Holland) would have us believe?

Mr. Lamont

My hon. Friend is correct. The surplus that we enjoy on our invisible earnings is the highest in the world.