§ 11. Mr. Jacques ArnoldTo ask the Chancellor of the Exchequer if he will make a statement on the effect on the balance of payments now and in the future of inward investment into the United Kingdom.
§ Mr. PortilloInward investment encourages competition and innovation, boosts productive capacity and is good for the balance of payments.
§ Mr. ArnoldCan my right hon. Friend confirm that, of all the Japanese investment into the 12 countries of the European Community, more than 40 per cent. has come to 1066 the United Kingdom and that, likewise, more than 40 per cent. of United States investment into Europe has come to the United Kingdom? Does that not contrast with the dark days of the last Labour Government when multinationals were leaving Britain in droves?
§ Mr. PortilloIt is indeed 40 per cent. in both cases. However, my hon. Friend need not only look back; he can look forward to what Labour would do in office. The Opposition are supporters of the European socialist manifesto which proposes that tax rates in Britain should be levelled up to European Community levels. Our rate of corporation tax is 33 per cent., whereas in Belgium it is 40 per cent., in Italy 52 per cent. and in Germany 60 per cent. The implication is that Labour would wish to raise corporation tax to the levels of the Community.
§ Mr. CryerIf that inward investment has been so beneficial to our balance of payments, why are we running at a deficit of about £12 billion a year? Is it not true that the economic policies of this wretched Government have created 2.5 million job losses in manufacturing industry, so that we cannot actually supply any demand for our exports from our own manufacturing industry because of the wasteland that the Government have created—worse than any wastelands created by Hitler during the 1939 to 1945 war?
§ Mr. PortilloThe hon. Gentleman was talking absolute rubbish, even before he took off at the end of his sentence into hyperbole. I should remind him that the United Kingdom invests more abroad than is invested in this country. We, of course, have all the benefit of that flow. This country believes in free trade, in investing heavily abroad and in allowing people to invest in this country. Free trade is good for this country. It is a pity that the Labour party has not yet recognised that.
§ Mr. RiddickHas my right hon. Friend had an opportunity to see the latest issue of "In Yorkshire and Humberside", which reveals that, in the 12 months to March 1993, 42 foreign companies invested in that region, creating 6,500 new jobs? Do not foreign companies come to Britain to invest because we do not have the social chapter, the job-destroying minimum wage and an interfering Government imposing a corporatist-style, bogus, so-called business plan on industry?
§ Mr. PortilloYes; and if I may broaden that out to the national scene, total inward investment in this country over the past five years has been about £91 billion, and about 275,000 jobs have been created—for all the reasons that my hon. Friend gives, and particularly because we still retain low marginal rates of taxation, which the Labour party wishes us to do away with.