§ Lord SHINWELLMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government to state the total amount of British investments in West Germany since the date of accession to the EEC and the total amount of West German investment in Britain during the same period.
Lord ORAMMy Lords, the information available relates to overseas direct investment up to 1975. In the three years 1973 to 1975 the direct investment by United Kingdom companies, other than oil companies, in the Federal Republic of Germany was £311 million, and the direct investment by the Federal Republic of Germany in the United Kingdom, other than in oil and insurance, was £61 million.
§ Lord SHINWELLMy Lords, I put down this Question because of the information conveyed to me from a certain source. Apparently my suspicions have been confirmed that during the years mentioned we have actually been investing more in Germany than Germany has been investing in our country, and yet there has been a clamour in the United Kingdom—and quite rightly—that we should have more investment in our industry. Why is it that we have invested so much in Germany and there has been much less investment in the United Kingdom?
Lord ORAMMy Lords, it is true, as my original Answer indicated, that investment in Germany by United Kingdom companies exceeds that coming from the opposite direction, but there is no particular reason why inward and outward investment should balance in relation to any particular country. However, I would inform my noble friend that the total figures which he asked for in his Question, and which I gave, conceal the fact that the gap has been narrowing. Investment by United Kingdom companies in the Federal Republic of Germany has fallen from £149 million in 1973 to £108 million in 1974, and £53 million in 1975. Investment by West German companies in the United Kingdom has fluctuated. It was £17 million in 1973, £33 million in 1974, and £11 million in 1975. I assure my noble friend that we are taking steps to encourage more German companies to invest here.
§ Lord SHINWELLMy Lords, I am at a loss to understand why, in his supplementary answer, my noble friend speaks about the margin being narrowed when he did not mention that in the first Answer. Are we to understand that there are institutions in this country, and private investors, who prefer to make a higher profit by investing in Germany than they can make in the United Kingdom? Is that the motivation?
Lord ORAMMy Lords, my original Answer answered my noble friend's original Question. The fact that I did not go further was because I knew he would ask supplementary questions which would enable me to give him further information. As to the motives for investment in Germany, I think these would vary considerably. Possibly the factor that my noble friend has mentioned is one factor, but there are others. The factors which influence companies making investment decisions are many. For example, they may wish to penetrate overseas markets for United Kingdom exports; they may wish to improve distribution facilities, or to support a larger research and development base here than might otherwise be possible. All these factors contribute to maintaining employment in the United Kingdom. May I suggest to my noble friend that it is not quite a black and white situation. There is a great variety of factors that need to be taken into account.
§ Lord HALEMy Lords, could the noble Lord say what steps are being taken to encourage German investment in this country? Could he also say what, at the moment, appears to be the potential result of the steps that are being taken?
Lord ORAMMy Lords, the Department of Industry has a continuous programme of promotional activity both in the Federal Republic of Germany and in other EEC countries, and commercial staff at the embassy and the consulates general in the Federal Republic of Germany are also in contact with potential investors every day. I assure my noble friend that there is considerable activity of this kind.
§ Lord WIGGMy Lords, would not the Minister agree that one of the fairy stories conveyed to the British public 4 was that if we joined the Common Market there would be a tremendous flow of investment into this country, whereas in actual fact the reverse is the truth?
Lord ORAMMy Lords, there again I think my noble friend has oversimplified the matter. The figures fluctuate considerably from year to year and there is not a simple pattern such as he indicates.
§ Lord GLENKINGLASMy Lords, may I ask the Minister to study the question of German investment in Southern Ireland, which seems to have been on a very much greater scale than in Britain, to see whether there are perhaps some ways in which we could make investment from Germany more attractive in this country?
Lord ORAMMy Lords, that goes somewhat wider than the original Question, but I take note of what the noble Lord said and I will certainly look into it.
§ Baroness GAITSKELLMy Lords, why should there be any special ways of investing in Germany now? Do we not have many other countries in which we might do better to invest?
Lord ORAMMy Lords, there are no special activities in relation to Germany other than those which apply to other countries. We encourage inward investment from countries other than Germany. I was just answering the Question, which happened to refer to Germany, but the activities which I indicated in relation to the Federal Republic could be repeated elsewhere.
§ Lord BLYTONMy Lords, may I ask my noble friend to accept that part of the disastrous result of joining the Common Market has been our acceptance of the export of capital?—something we were dead against before we joined.
Lord ORAMNo, my Lords. "The export of capital" phrase which my noble friend uses is, if I may say so, a little misleading. Investment in other EEC countries is, with minor exceptions, financed by earnings from previous investments in those countries or by foreign currency borrowing.