HC Deb 15 May 1996 vol 277 cc937-9
10. Mr. Waterson

To ask the President of the Board of Trade if he will make a statement on the current level of inward investment into (a) the United Kingdom, (b) France and (c) Germany. [28365]

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Phillip Oppenheim)

The latest OECD figures available show that, in 1993, the UK attracted £130 billion by value of stock compared with approximately £80 billion for France and £41 billion for Germany.

Mr. Waterson

I thank my hon. Friend for that answer. How does he explain the fact that this country seems to be attracting more inward investment than France and Germany put together? Is it merely a co-incidence, or is it due to the fact that, in this country, we have a Government who are committed to enterprise and to reducing burdens on business, and who will have nothing to do with the pettifogging, bureaucratic interference in business that we can expect from Opposition Members, the home-grown socialists, or their socialist friends in Europe?

Mr. Oppenheim

I thank my hon. Friend for that question. Because he was politically active in the 1970s, he will remember the 1970s fondly as the good old days of Labour's industrial strategy, when international companies fell over themselves to move production from Britain and a trade union leader said that he would not buy a Ford made in a British plant, but would only buy one from a German plant.

Now, by contrast, Ford and General Motors are using Britain as a core export base; Toyota, Honda and Nissan are exporting; and even Rover, which used to make such world-beaters as the Austin Allegro and the Morris Marina under Labour Governments, is now exporting more than half its production.

Mrs. Anne Campbell

Is it not true that the increase in inward investment in 1995 is largely due to takeovers of investment banks and privatised utilities? How is that bringing extra jobs to the UK?

Mr. Oppenheim

I do not think the hon. Lady is right, but I shall be interested in any figures that she can produce. What is true is that the manufacturing performance of this country has been transformed.

Manufacturing productivity, which is the key element in competitiveness, was stagnant and bottom of all the major industrial countries when the Labour party was in power, whereas manufacturing productivity growth has been top of the G7 countries under the present Government. I remind the hon. Lady that manufacturing output actually fell under the last Labour Government, whereas it has risen quite sharply under the present Government.

Mr. Atkins

Does my hon. Friend accept that part of that inward investment will have come from Saudi Arabia? Does he agree that Saudi Arabia is an extremely important trading and investment partner, and that the constant criticism in the media about its importance to export, investment and other trade with this country can only be damaging and ought to be stopped?

Mr. Oppenheim

I entirely agree. It always amazes me that Opposition Members are so quick to attack countries that are our good trading partners and allies, when it is clear that in many other countries that still have socialist regimes human rights abuses are far worse than they are in Saudi Arabia.

Mr. Tony Banks

Will the Minister comment on the fact that one of the reasons given for the substantial investment by Taiwan in south Wales that has been announced—

Mr. John D. Taylor

South Korea.

Mr. Banks

I am told that the investment is coming from South Korea. One of the reasons given for that is that the rates for skilled workers in South Korea are higher than those in south Wales. Is the Minister proud of the fact that the Conservative Government are building a coolie economy? If so, when can we expect to see little boys going up chimneys again?

Mr. Oppenheim

That was one of the silliest questions that the hon. Gentleman has ever asked. He makes the simple error that all his hon. Friends make: they confuse low wages with low costs. If they were correct, everything would now be made in Bangladesh. What matters is wages relative to productivity. The real difference between Britain now and Britain in the 1970s is not that wages have fallen—they have risen by 50 per cent. in real terms since 1979—but that productivity has increased by 90 per cent. since the days of stagnant productivity under Labour. That is why British industry is successful again, and why foreign companies want to come and manufacture goods here.

Mr. Ian Bruce

Has my hon. Friend observed that there has been something of a downturn in new inward investment in the United Kingdom? Might that be because of new Labour's threatened policy of windfall taxes on those who make high profits? Is it not clear that, while a Conservative Government have been ensuring that the utilities, for instance, have given money back to the consumer—which is what people want—the Labour party has got it completely wrong, and is already trying to scare off inward investment?

Mr. Oppenheim

I agree. I thought it interesting that, at this morning's press conference on the youth guarantee, the great and dear leader did not mention his primary policy for youth, the minimum wage. Perhaps he needs a youth guarantee because of all the young people who will lose their jobs if Labour is ever given the chance to implement that policy.