HC Deb 19 June 1996 vol 279 cc870-2
16. Dr. Spink

To ask the President of the Board of Trade what assessment he has made of the impact of deregulation on inward investment. [32125]

Mr. Oppenheim

Our deregulated business environment is recognised as one of our key strengths by inward investors. It is one of the many contributory factors that have made the United Kingdom the No. 1 location for inward investment into Europe.

Dr. Spink

Does my hon. Friend agree that, if this or any Government followed the European model or, indeed, the socialist model on regulation and interference, inward investment would fall?

Mr. Oppenheim

My hon. Friend is right, and I will give him one good example of where our policies of deregulation and open markets have led to more inward investment. We were leaders in deregulating and privatising telecommunications. We were opposed at every step in liberalising telecommunications by scare stories that were published and peddled by Opposition Members. We were told that telecom engineers would be electrocuted up telegraph poles, that little old ladies in remote communities would be cut off and that telephone boxes would disappear from high streets. We have seen instead the most rapid improvement in telecommunication services coupled with falling prices and an increased number of telephone boxes of any major industrial country, which has helped to attract business to Britain and jobs for British people.

Mr. Purchase

Will the Minister admit that about one quarter of all inward investment has been for the purpose of purchasing British companies, and that the cumulative total of capital exported from this country on the same basis is far in excess of the sum invested in Britain? Does that not show that Britain's so-called deregulated economy is less attractive to investors than so-called regulated economies elsewhere?

Mr. Oppenheim

Either the hon. Gentleman is one of the new Labourites who believe in the open market or he is not. If he does believe, as his party apparently does, he should accept two-way investment flows. The Germans, who have a more regulated market than ours, invest more in Britain than we do in their country. Conversely, we export more to France than the French invest in Britain. That is the nature of a modern global economy. Perhaps the Germans know something that the French do not.

Mr. Anthony Coombs

As Britain attracts more than 40 per cent. of US and Japanese investment in Europe, does my hon. Friend agree that that might have more to do with an observation made last week by George Simpson, chief executive of Lucas Industries, who is to be the new chairman of GEC? He commented that, in 30 years in business, he could not remember a time when economic policy was managed in such a way as to produce a better competitive environment for British industry.

Mr. Oppenheim

My hon. Friend is absolutely right. That state of affairs is in stark contrast to the position that we inherited. I remember a trade union leader saying that he would only buy a Ford car made at one of the company's German plants. In the 1970s, General Motors and Ford were falling over themselves to push investment out of Britain and did not export any cars from this country. Today, GM, Ford and the Japanese companies Nissan, Toyota and Honda are exporting vast numbers of cars from Britain. Even Rover, which manufactured international jokes such as the Allegro and the Marina when Labour was in power, is successfully exporting no less than half its output.