HC Deb 12 February 1992 vol 203 cc959-61
3. Mr. Mans

To ask the Secretary of State for Trade and Industry what assessment he has made of the attractiveness of the United Kingdom as a location for telecommunications headquarters of internationally mobile companies.

The Minister for Corporate Affairs (Mr. John Redwood)

The United Kingdom is extremely attractive as a location for inward investment in the telecommunications industry. Recently, US West and IBM have announced that they are to move their business headquarters to the United Kingdom. One of the important characteristics of those moves was the support that it represented for British liberalisation policies. Many more companies will follow as investors.

Mr. Mans

I thank my hon. Friend for that answer. Will he confirm that the Government will continue their policy of liberalisation in the telecommunications industry and continue to welcome foreign companies to compete on an equal basis in this country—provided that, in return, our companies can compete in those countries?

Mr. Redwood

My hon. Friend is quite right. That is exactly what the Government intend to do. We welcome all sorts of investors here on fair terms. Another feature that we welcome is that manufacturers are now investing here in the manufacture of equipment to supply the telecommunications industry because of the strength of the underlying service provision in this country. How much I welcome NEC, Motorola and the other companies, which make large numbers of mobile phones in this country in response to the strength of the cellular mobile phone market.

Mr. Alan Williams

Is it not strange that, while foreign companies invest in this country, British companies which are aware of the position here have invested £40 billion more overseas than the foreigners have invested here?

Mr. Redwood

Investment both ways is welcome because free trade and free investment flows increase world prosperity. I am delighted that enough large companies in this country have the profits to invest both here and abroad to bring more dividends and income into this country. It is a great testimony to this country that far more of the large, successful companies in Europe are based in Britain than in France or Germany.

Mr. Gerald Howarth

Does my hon. Friend agree that the stunning improvement in telecommunications in this country in the past 12 years has been led by British Telecom? Will he confirm that not only has British Telecom invested—this is what the Opposition keep talking about—£20,000 million in new technology, but it has contributed no less than £1,000 million in corporation tax to the Exchequer?

Mr. Redwood

My hon. Friend is right. Much of the major investment in this country's telecommunications infrastructure in recent years has been from BT, which has made a much bigger contribution to the Exchequer than it did in the 1970s, as it is more efficient, more productive, sells more services, makes more money and pays more tax. That is true not just of BT—a large number of other investors are coming on to the market. Some £5 billion is pledged from the cable companies alone, which now have 20,000 telephone service customers. That is just the beginning. Many thousands more will follow. We offer choice, competition and more investment—how different from Opposition policies which would smash profits and investment, and return to a monopoly.