Investment (Hansard, 3 July 1991)

§ 3. Mr. Butler
To ask the Secretary of State for Trade and Industry what proportion of(a)United States and(b)Japanese investment in the EC came to the United Kingdom in the latest available year.

§ The Minister for Trade (Mr. Tim Sainsbury)
It is estimated that the United Kingdom has 42 per cent. of United States investment in the European Community as at the end of 1990 and 39 per cent. of Japanese investment as at the end of March 1991.

§ Mr. Butler
My hon. Friend will be aware that academic research shows that the tax regime of a country is more important for overseas investors than state handouts. Does not that prove that overseas investors have confidence in the continuation of the British tax regime under this Government and that they have greater confidence in the future of our economy than do Opposition Members?

§ Mr. Sainsbury
I absolutely agree. The tax regime is important in encouraging inward investment. Last year's inward investment decisions, of which about 350 are known to my Department, will either guarantee the security of, or create, 60,000 jobs in all regions of the United Kingdom. We would be foolish to put that amount of job creation at risk.

§ Dr. Kim Howells
Does the Minister agree that although we greatly welcome inward investment from Japan and America, it is still important that we retain our centres of innovation and of research and development? Are not they the real levers for determining the future security and direction of the British economy?

§ Mr. Sainsbury
Indeed, and I hope that the hon. Gentleman will welcome the fact that, perhaps as a result of the Government's encouragement of a tax regime for enterprise, industry's own funding of research and development grew by more than 50 per cent. in real terms between 1983 and 1989.

§ Mr. John Carlisle
My hon. Friend will be well aware of the large American investment in my constituency town of Luton by General Motors. At a time when the car manufacturing industry is very much on its knees, as evidenced by Ford's slashing prices, will he look sympathetically at any request from GM for any assistance that might be available either through funding in this country or through funding from the European Community?

§ Mr. Sainsbury
My hon. Friend will recognise that although demand for cars in this country is down, the car industry is doing outstandingly well in exports. All parts of the industry deserve congratulations on that achievement.