HC Deb 15 June 1994 vol 244 cc620-1
9. Mr. Hayes

To ask the Secretary of State for Foreign and Commonwealth Affairs what his Department is doing to attract more inward investment from Japan.

The Minister of State, Foreign and Commonwealth Office (Mr. Alastair Goodlad)

Attraction of more inward investment is a high priority for our embassy in Tokyo and consulate-general in Osaka, which work closely with the Invest in Britain Bureau of the Department of Trade and Industry and with regional agencies. We shall soon open a new office in Nagoya for inward investment and trade promotion.

Mr. Hayes

Will my right hon. Friend join me in welcoming the new massive investment from Honda in the United Kingdom? Does he agree that it is yet another tribute to the success of our missions abroad?

Mr. Goodlad

My hon. Friend is absolutely right. I greatly welcome Honda's announcement of a further investment of £330 million in the United Kingdom, which confirms its continuing commitment to this country as a base for its car-making operations in Europe. The Government will continue to work with the company to ensure the success of its United Kingdom operations and its many British suppliers.

Mr. Enright

Can the Minister name a single Japanese firm that does not fulfil the social contract? In fact, is not the contrary true? All Japanese firms fulfil and more the social contract and, indeed, the majority look for monetary union.

Mr. Goodlad

There are 200 Japanese manufacturing companies in this country covering a wide range of industries from electronics to consumables. Their working practices vary, as do British ones. We have made it clear that the social contract, which provides greatly increased legislative powers for the European Community in employment and social policies, would lead to damaging European Community laws being imposed in the United Kingdom. They would add to costs, cut competitiveness, destroy jobs and deprive United Kingdom employers and employees of their rights to decide the employment conditions that firms can afford. It is because this country is extremely competitive, whereas European competitiveness is declining in the world, that we have more than 41 per cent. of Japanese investment in the European Community.

Mr. Nicholas Winterton

While very much appreciating the tremendous importance of Japanese investment in this country, may I ask my right hon. Friend to accept that the Government should spend as much time seeking investment from other countries, because to do so provides us with opportunities to do business with those countries? Inward investment from Japan is important, but other countries should not be ignored, as they provide us with equal if not better opportunities.

Mr. Goodlad

My hon. Friend is correct— that is precisely what the Government do. In 1992–93, at least 303 inward investment decisions were made by foreign companies, which created or safeguarded more than 56,000 jobs. Since 1979, more than half a million jobs have been created by overseas companies. In 1991, overseas companies provided 17 per cent. of all manufacturing jobs in the United Kingdom.

Mr. Rogers

Hon. Members on both sides of the House applaud and support the efforts of the Government to obtain inward investment, especially for the north-east and for south Wales, where the Labour-established Welsh Development Agency has been extremely successful. Does the Minister believe that the same number of inward investments, 303, would be made in a semi-detached Britain—a Britain condemned to Europe's slow lane?

Mr. Goodlad

Britain is the preferred location for Japanese investment because we provide excellent access to the European Community market. Companies consistently refer to the welcome that they receive from the Government. The Japanese choice of the United Kingdom shows that the Government have created the right framework for companies to invest and prosper, in comparison with the position in other European countries and in comparison with the position that would prevail in the highly unlikely event of the Labour party ever gaining the reins of power.