Jobs and Overseas Investment (Hansard, 5 April 1990)

§ The Minister of State, Department of Trade and Industry (Lord Trefgarne)
My Lords, according to the latest figures available to the DTI's Invest in Britain Bureau, from 1979 to 1989 there have been 2, 839 inward investment decisions of various kinds to locate in the United Kingdom. The projects were expected to create about 225, 000 new jobs and since 1983, when records were started, to have safeguarded a further 127, 000.

§ Lord Brougham and Vaux
My Lords, I thank my noble friend for that very interesting Answer. Can he tell the House what proportion of those jobs are in the car industry? Further, bearing in mind that the export volume of the car industry in 1989 was in the region of £ 8–2 billion— more than either the oil or aerospace industries— can he say what effect the growth of the Japanese car industry will have on the UK balance of payments?

§ Lord Trefgarne
My Lords, it is certainly true that many of the enterprises to which I referred were involved in the manufacture of motor cars. They will certainly represent an important aspect of our export performance in the future. That is why it is so important that there should be free circulation within the European Community in accordance with the provisions of the Treaty of Rome.

§ Lord Williams of Elvel
My Lords, I welcome the figures which the noble Lord has just given us. However, can he explain what assumptions have been made as to the 225, 000 jobs which have apparently been created and the 127, 000 jobs which have apparently been safeguarded? It must have been an extremely difficult statistical calculation. Can he give us some of the background to those figures?

§ Lord Trefgarne
My Lords, these figures were announced by the promoters at the time that they launched their projects. They do not take account of changes which have taken place since that time, whether they were reductions or even increases.

§ Lord Boyd-Carpenter
My Lords, is not my noble friend's Answer particularly satisfactory inasmuch as it indicates the confidence which overseas investors have in the stability of the British economy and, indeed, in the economic policies of Her Majesty's Government?

§ Lord Trefgarne
My Lords, I am certain that my noble friend is right. It is also a reflection of the improved industrial relations climate in this country which has resulted from the various pieces of legislation that have been brought in.

§ Lord Dormand of Easington
My Lords, I give a general welcome to the scale of inward investment in this country. However, does the Minister agree that there are areas in manufacturing industry which do not particularly attract inward investment and whose needs are not being met by domestic investment? Is not that at least to some extent a criticism of what the Government are doing to encourage domestic investment? Should not something be done about the situation?

§ Lord Trefgarne
My Lords, if the noble Lord will forgive me, I must point out to him that that is another question. In my view these are satisfactory figures, as my noble friend indicated. I agree that not every aspect of manufacturing industry has benefited from these inward investment decisions, but clearly major areas have benefited, including important areas of the United Kingdom.

§ Viscount Caldecote
My Lords, I greatly welcome the benefits that stem from this inward investment which has been stimulated by the policies of Her Majesty's Government. However, does my noble friend agree that most of the research and development work upon which these activities are based has been carried out overseas? Does he further agree that it is important to do everything possible to stimulate and encourage British companies to invest more in new competitive products?

§ Lord Trefgarne
My Lords, I am not sure that my noble friend is wholly correct. There have been many important inward investment decisions relating to research and development establishments per se. I hope that he will also find that to be satisfactory.

§ Lord Orr-Ewing
My Lords, is my noble friend aware that production plans of the three Japanese firms in this country indicate that they will produce about 500, 000 cars over the next five years? If that is to happen, is it not true that our balance of trade will be assisted to the tune of £ 13 billion and that it will greatly improve general confidence in this country and in our pound?

§ Lord Trefgarne
My Lords, it is certainly the case that the balance of payments deficit at present is almost wholly taken up by motor car imports of one kind or another from one country or another. That is why investment decisions such as those referred to by my noble friend are so important and why they will indeed have a very beneficial effect on the balance of payments, as he indicated.

§ Lord Tordoff
My Lords, while the noble Lord is in such a self-congratulatory mood perhaps he will also extend his congratulations to his noble friend Lord Cockfield on the work he carried out towards the implementation of the single market when he was a Commissioner in Europe.

§ Lord Trefgarne
My Lords, I am not in a particularly self-congratulatory mood. The figures speak for themselves; they need no help from me.