HC Deb 27 November 1991 vol 199 cc903-5
9. Mr. Squire

To ask the Secretary of State for Trade and Industry what recent representations he has received from business men about the need for the United Kingdom to remain a receptive and attractive base for inward investment.

Mr. Redwood

The CBI has recently pointed out how important inward investment is to this country, and pointed to the success of this Government in attracting it—a success not assisted by some in the Labour movement, who call it "alien". I hope that Opposition Members will dissociate themselves from that comment, because Japanese and American investment is more than welcome here.

Mr. Squire

Does my hon. Friend agree that a co-ordinated tax policy across the Community—now advocated by the Opposition—would severely damage inward investment, much of which is attracted here by our lower corporation tax and income tax rates? The Labour party advocates that in addition to its well-known policies of intervention, control and regulation.

Mr. Redwood

I agree with my hon. Friend. The tax on businesses is much lighter here than in France, and it is also lower than in Germany. That is a powerful argument for companies that are thinking of locating within the Community to come to Britain. Were we ever to have the misfortune of a Labour Government, which is unlikely in the immediate future, the British public might welcome common taxation systems. Average taxation rates would then be lower than Labour rates, but higher than Conservative rates. We intend to keep a Conservative Government for that and other reasons.

Mr. Ted Garrett

The Minister made great play of being single-minded. Does he accept that that single-minded attitude about which he is boasting is the curse of British manufacturing industry? How can one expect inward investment when no assistance is given to our existing industries? I am referring to the machine tool industry, which is a key industry now suffering and struggling to keep seventh place in the world. There were further redundancies last week. I warn Ministers that if the machine tool industry goes under, it will act as a deterrent to inward investment because it will show that the Government are not committed to the principle of assistance.

Mr. Redwood

The Government have a clear industrial policy which has been set out by my right hon. Friend the Secretary of State. Low taxation is vital to that policy, as is the assistance given in some assisted areas by my hon. Friend the Minister responsible for regional selective assistance. Also vital is the support that we give to exports and trade abroad when British companies are involved. The hon. Gentleman should do his homework on those points. We have a single-minded policy for British industrial success, but the Opposition have a feebleminded policy which would achieve nothing for British industry.

Mr. Soames

Is my hon. Friend aware that my constituency is extremely attractive geographically for countries making inward investment in Britain and that it has prospered from such inward investment? Does my hon. Friend agree that more than ever it is important that an agreement is reached at Maastricht in which Britain takes a whole-hearted role in the European Community, because otherwise it will cease to be so attractive for inward investment?

Mr. Redwood

We all hope that there will be a good agreement at Maastricht. We want an agreement that promotes business and does not impose burdens or barriers upon the business community. That is what the Government are fighting for, among other things, in those important discussions. The success of our policy is evident in Crawley, which is well served by my hon. Friend. It is also evident in the overall figures, which show that we have attracted almost 40 per cent. of the total American and Japanese investment into the European Community. Those are astonishingly good figures which show the attraction of Britain as a location for investment.