HL Deb 30 July 1985 vol 467 cc154-7

2.51 p.m.

Lord Orr-Ewing

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government how many jobs were created in 1984 as a result of inward investment.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)

My Lords, the Department of Trade and Industry's Invest in Britain Bureau estimates that over 29,000 jobs will be created as a result of inward investment decisions in 1984. The department also estimates that almost 89,000 jobs will be created as a result of inward investment decisions taken during the years 1980 to 1984.

Lord Orr-Ewing

My Lords, can my noble friend say, as a result of that satisfactory reply, which country makes the biggest investment in this country thereby contributing to jobs? Is it still the USA as heretofore? Can he say how much inward investment contributes to the growing total of employment in this country?

Lord Lucas of Chilworth

My Lords, I can tell my noble friend that the United States of America continued to be the largest inward investor to the United Kingdom, followed by West Germany and then Switzerland. About 14.9 per cent. of employment is represented by inward investment decisions taken last year.

Lord Taylor of Gryfe

My Lords, would the Minister agree that these satisfactory results are a result of investment decisions made in the last two or three years by major companies? Has his attention been drawn to the statement of the chief executive of the Scottish Development Agency to the effect that the reduction in regional grants which is now operating places us at a disadvantage in attracting inward investment at the present time?

Lord Lucas of Chilworth

My Lords, I understand what the noble Lord, Lord Taylor of Gryfe, is speaking about. I was discussing this matter with the Scottish Development Agency only about 10 days ago. I have formed the view from information I received there, and also from my overseas visits, that regional grants are not the prime consideration of overseas companies considering investment in the country. Prime considerations, rather than grants, are the stability of labour and the stability of our financial systems.

Lord Bruce of Donington

My Lords, is the noble Lord aware that the figures he has given are a testimony to the confidence of those overseas in the capability, zeal, and endurance of the labour force in this country? Is he aware that on the basis, as announced by his noble friend on 23rd May last, of £1,492,000,000 investment in the United Kingdom in 1984, and on the basis of some 46,000 jobs being either created or safeguarded in that year, the figure runs out at £32,000 per job? Would the noble Lord convey to his right honourable friend that, although inward investors are prepared to invest £32,435 per job in the United Kingdom, his own department appears to be willing to invest only £10,000 a job or, in some cases, £5,000?

Lord Lucas of Chilworth

My Lords, I agree with the noble Lord, Lord Bruce of Donington, that a number of inward investment decisions are certainly based on the confidence that manufacturers have in our labour force. So far as the rather involved sums that the noble Lord has offered me, I can answer him by saying yes, as he asked me, I will convey that information to my right honourable friend.

Lord Boyd-Carpenter

My Lords, is my noble friend aware that this satisfactory flow of investment is also an indication of the confidence that foreign investors have in economic policies of Her Majesty's Government?

Lord Lucas of Chilworth

My Lords, indeed my noble friend is quite right, and that comes over frequently when one is abroad talking to potential investors.

Lord Glenamara

My Lords, can the noble Lord say how many of these new jobs have been created in the North-East of England, where unemployment is by far the highest in Great Britain and continues to rise?

Lord Lucas of Chilworth

My Lords, I regret that I have not got a breakdown across the country of where these jobs have been created. I shall certainly let the noble Lord know.

The Earl of Lauderdale

My Lords, can my noble friend tell the House how many thousand new jobs have been created in this country since the present Government first took office?

Lord Lucas of Chilworth

No, my Lords.

Lord Diamond

My Lords, is that not a disgraceful statement when only a short time ago a Minister from the Front Bench, the noble Lord, Lord Young of Graffham, agreed with me that there had been a substantial fall in jobs since the Government went to the country—four times the size of the rise which has occurred in the last year and a half?

Lord Lucas of Chilworth

My Lords, that may be so. I do not have those figures since the Question on the Order Paper does not refer to that but to inward investment.

Lord Dean of Beswick

My Lords, would the Minister care to comment on reports in the press at the weekend that the figures due to be released on the current unemployment situation show a further substantial deterioration in the last month? Does this not indicate that, whatever the size of inward investment at present, it needs to be more than it is in order to arrest a further decline in the situation?

Lord Lucas of Chilworth

My Lords, I am not prepared to comment upon that.

Lord Northfield

My Lords, in case there is some misapprehension about the costs of recruiting of this kind, is the noble Lord aware that in the case of my own new town we recruit new jobs from Japan and America at a cost of something like £1,000 a job and not at the astronomical figures which are often bandied about? Also, in case there is some feeling that cash incentives are not important, may I ask the noble Lord whether he is aware that in many cases they are critical at the last stage, and in this respect that one of the difficulties we face in England is that the Scottish and Welsh Development Agencies have far too much money to hand out in grants of this kind, leaving urban areas of England far behind in the queue?

Lord Lucas of Chilworth

My Lords, of course cash incentive is an important factor. It is not, however, the most important factor taken by companies considering investment in this country. At the end of the day we have to say that the competition across Europe, indeed across the world, to encourage investment from other countries which advances so much in technology, management techniques and so on, is something we have to fight very hard. But this investment is of great economic and social benefit to this country, and is to be further encouraged.

Lord Weinstock

My Lords, does the noble Lord realise that jobs are protected, or created, in this country at no cost at all when the Government and the great national industries buy the production of British factories instead of the production of foreign ones?

Lord Lucas of Chilworth

My Lords, I think I can see what lies behind that question, which is so very wide of the Question on the Order Paper.

Lord Bruce of Donington

My Lords, in view of the noble Lord's answer to his noble friend Lord Boyd-Carpenter, who sought to measure a confidence in Her Majesty's Government related to inward investment, will the noble Lord inform his noble friend Lord Boyd-Carpenter and the House that the outflow of capital during that period has been seven times the inflow?

Lord Lucas of Chilworth

My Lords, it would be a sad thing in the case of a country such as ours, operating in the competitive way that exists, if there was not a transference of funds as between one country and another. Other countries encourage funds from this country and we derive considerable benefit from the dividends of those investments. Similarly we encourage inward investment to the benefit of those countries which can buy our products.

Lord Nugent of Guildford

My Lords, would not one of the factors which affect inward investment be complete freedom from exchange control in this country?

Lord Lucas of Chilworth

My Lords, that is a very important factor and it has given rise to great opportunities which have proved to be very beneficial and which help our competitive edge in world markets.

Lord Somers

My Lords, in view of the figures which the noble Lord gave, is he able to say what percentage of those jobs have been taken up?

Lord Lucas of Chilworth

My Lords, we estimate from the surveys which the department makes that a number of jobs have been retained, but in 1984 29,000 new jobs will have been created and will be taken up when those companies come on stream.