Inward Investment (Hansard, 11 January 1995)

§ 10. Mr. Waterson
To ask the President of the Board of Trade if he will make a statement about the prospects for inward investment.

§ The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)
I am confident—[HON. MEMBERS: "Who he?"] And a happy new year to the Labour party, too.
I am confident that overseas companies will continue to recognise that the Government's economic policies make the United Kingdom an attractive place to do business and that we will remain the preferred location in Europe for foreign investment. The prospects are excellent, but success has to be worked for. For that reason I have strengthened my Department's Invest in Britain bureau, including the appointment of a chief executive from the private sector.

§ Mr. Waterson
I thank my right hon. Friend for that answer. Does he agree that one of the attractions to inward investors is the fact that in France, for example, about 29 per cent. of total labour costs go on non-wage social costs, whereas the equivalent figure in this country is only 17 per cent.?

§ Mr. Heseltine
My hon. Friend is right to state the discrepancies and problems that would arise from Brussels if we did not possess the opt-out to the social contract. The problems in Brussels are ever present in the mind of the Labour party, the leader of which has had to go to Brussels to put the boot in to members of his own party who are trying to upstage his, key proposals to modernise the Labour party—what a hope!

§ Mr. Stevenson
Is it not true that much of the so-called "investment" has been in the form of takeovers and asset swaps, some of which have turned out to be no more than asset strips? Is the President of the Board of Trade aware of the activities of the Dupont company, for example, which acquired much of the capacity of ICI and resulted in many plant closures and job losses?
Will the Minister inquire into that disgraceful situation involving a major American-based international company? Will he also ensure that the trade unions which represent the workers at the plant and which have been refused the information that they need in order to make representations on behalf of their members are given that information?

§ Mr. Heseltine
It is absolutely extraordinary: this country is facing some of the most exciting economic 144 prospects that we have enjoyed in decades and Opposition Members carp and moan as though the results are nothing like as good as they are.
It is time that the Opposition recognised that we have moved back into a balance of payments surplus. That is a huge tribute to the policies of the Government. Why cannot the Labour party tell people the good news and encourage, as opposed to constantly undermine, the efforts of the United Kingdom?

§ Mr. Page
While being grateful for and impressed by the huge amount of inward investment and the hundreds of thousands, if not millions, of jobs that have been created, will my right hon. Friend speculate about whether he believes that that inward investment flow will be enhanced or diminished by the Labour MEPs' enthusiasm for clause IV?

§ Mr. Heseltine
My hon. Friend raises the point to which I referred a moment ago. The Leader of the Opposition is flogging around Brussels at the moment because he is absolutely terrified of the damage that his own supporters are doing to his prospects of ever leading this country. I must say that my sympathies are all on the side of the Labour MEPs who are obviously determined—

§ Mr. Foulkes
On a point of order, Madam Speaker.

§ Madam Speaker
Order. Points of order come after Question Time, but I will anticipate what the hon. Gentleman wishes to say: at Question Time we deal with Government policy, not Opposition policy. I call Dr. Cunningham.

Dr. John Cunningham
Thank you, Madam Speaker. Good inward investment in the British economy is welcome. However, is the right hon. Gentleman satisfied that inward investment from Hong Kong Land and the Swiss Bank Corporation is being conducted properly in the hostile takeover bid for Northern Electric? Is there not a case for an inquiry into the Northern Electric share dealings, for example? Is not there a question of insider dealing and the exploitation of legal loopholes by the Swiss Bank Corporation?
Is it acceptable that those practices should go on in a hostile takeover bid for a regional electricity company? Will those matters not set the trend for the future ownership of regional electricity companies? Does not the right hon. Gentleman think that there are so many questionable aspects to the bid that he should ask the Monopolies and Mergers Commission to investigate all parts of it?

§ Mr. Heseltine
The right hon. Gentleman raises some very important issues. He will understand that inquiries are being conducted in the proper manner and it would be quite inappropriate for me to add in any way to a general acknowledgement of those inquiries.

§ Mr. Sykes
Talking about inward investment and its importance in creating jobs, is my right hon. Friend aware that a large international company in my constituency, when faced recently with a decision about whether to build a new factory in France, decided not to do so because of the cost of the social chapter? It decided instead to double the size of the production line in Scarborough—much to the benefit of my constituents.

§ Mr. Heseltine
My hon. Friend gives the House more good news. Inward investment at present accounts for 145 17 per cent. of employment in this country, 23 per cent. of net output, and 33 per cent. of gross value added in manufacturing.