§ 3.12 p.m.
§ Lord ORR-EWINGMy 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 whether they can estimate the total capital investment made in the United Kingdom by:
- (a) other EEC countries;
- (b) the USA; and
- (c) Japan;
§ The MINISTER of STATE, TREASURY (Lord Cockfield)My Lords, direct investment in the United Kingdom by other EEC countries totalled £1 billion between 1973 and 1978, the latest year for which figures are available. This excludes oil investment. For the United States, the comparable figure is £3 billion and for Japan £50 million. Investment in the United Kingdom by other EEC countries and by the United States has been significantly higher since we joined the EEC, and in recent years the figures have been on a strongly rising trend.
§ Lord ORR-EWINGMy Lords, while thanking my noble friend for those extremely stimulating figures, may I ask whether it is not a fact that the £1 billion from the EEC and the £3 billion from the United States have created not only a massive injection of capital but a massive injection of technology and the jobs which go with those two factors? May I ask my noble friend whether these jobs would be put at risk if a future Government decided that we should no longer be a base within the EEC and if we should be compelled to leave the EEC under left-wing policies?
§ Lord COCKFIELDMy Lords, the point made by my noble friend is a very valid one. Inward investment of this kind is of great value to the United Kingdom economy, both for the jobs it creates and for the new skills and new products it brings into the United Kingdom 1205 economy. There is no doubt whatever that our membership of the EEC has greatly stimulated investment of this kind in the United Kingdom.
§ Lord SHINWELLMy Lords, may I ask the noble Lord to explain why, in view of the rising trend of investment by EEC countries in the United Kingdom, there is more unemployment?
§ Lord COCKFIELDMy Lords, the rising trend of investment in the United Kingdom has created additional employment in the United Kingdom. The level of unemployment would have been higher but for this inward investment. It is a matter of considerable significance that during the 1970s the proportion of total employment in manufacturing industry, represented by foreign-owned companies, increased from 9 per cent. of the total to 14 per cent. of the total.
§ Lord BESWICKMy Lords, if we are genuinely trying to assess the consequences of joining the EEC, ought we not to avoid these highly selective figures? In this particular case, can the noble Lord tell us what was the outward investment over this period into the EEC countries?
§ Lord COCKFIELDMy Lords, membership of the EEC has given the United Kingdom investment opportunities which otherwise would not have existed. It is of course a complete fallacy to assume that outward investment of this kind is at the expense of the United Kingdom economy. This is not true at all. There is a shortage in this country not of the capital needed for investment but of profitable investment opportunities, and it is those profitable investment opportunities that we need to create.
§ Lord BESWICKMy Lords, what the noble Lord says may have some truth in it, but would he now be good enough to answer my question? Would he tell me what was the outward investment over the same period?
§ Lord COCKFIELDMy Lords, the Question is directed to the inward investment in the United Kingdom. If the noble Lord wishes figures for outward investment, which is the reverse of inward investment, perhaps he would table a Question.
§ The Earl of ONSLOWMy Lords, can the noble Lord tell us, with a view to the Japanese inward investment, whether the opportunities for outward investment by British companies into Japan are the same and as easy as are the Japanese ones into this country?
§ Lord COCKFIELDMy Lords, I think, with respect to my noble friend, it is valid to make the point that inward investment from Japan is of a very small order indeed. In fact, £50 million over the period 1973 to 1978 does not represent any very significant inflow.
§ Lord BALOGHMy Lords, can the noble Lord the Minister tell us how much portfolio investment there was, which does not create employment or new products?
§ Lord COCKFIELDMy Lords, portfolio investment is a completely different question from investment in British industry.
Lord BRUCE of DONINGTONMy Lords, is the noble Lord aware that the outward investment from the United Kingdom to the various sources of investment named here over the same period is considerably in excess of the figures that the noble Lord has given us relating to inward investment in this country? Is he further aware that a large amount of the inward investment in this country in money terms has also been counteracted by some £2,000 million worth of cash contribution out of the taxpayers' money to the EEC?
§ Lord COCKFIELDMy Lords, so far as the last point raised by the noble Lord is concerned, the present Government have taken effective steps to deal with the contribution payable to the EEC, a matter about which the previous Administration did nothing whatever, despite their claim to have renegotiated the financial terms. So far as the first supplementary question of the noble Lord is concerned, he is assuming that outward investment is to the detriment of the United Kingdom. It is nothing of the sort; it is of value to the United Kingdom in many directions, not the least because outward investment often provides exports from the United Kingdom.
Lord BRUCE of DONINGTONMy Lords, is the noble Lord aware that he entirely misrepresented what I said? In the question which I put to him I did not suggest that outward investment from the United Kingdom was not advantageous to the United Kingdom. He, as he very often does, put those words into my mouth. I asked the noble Lord for his confirmation in quantitative terms, irrespective of the benefits conferred one way or the other, that the outward investment to those sources in fact exceeded the inward input from those sources.
§ Lord COCKFIELDMy Lords, so far as the first part of the noble Lord's supplementary question is concerned, I am glad to have his support that outward as well as inward investment is of great value to the United Kingdom. So far as the figures are concerned, I have made the point in reply to his noble friend that the Question relates to inward investment in the United Kingdom. If he wishes the figures for outward investment, perhaps he would table a Question.
§ Lord GRANVILLE of EYEMy Lords, may I ask the noble Lord whether the figures he has given refer entirely to capital investment and not to "hot" money coming into this country to take advantage of the high interest rates, money which can be withdrawn at the drop of a hat?
§ Lord COCKFIELDMy Lords, the figures that I have given relate to direct investment in British industry in the form of buildings, plant, machinery and working capital. That is an entirely different question from the question of money which may come into this country for other reasons.
§ Lord ORR-EWINGMy Lords, perhaps I may put one last point. In view of these satisfactory figures and the fact that my noble friend said that there was a rising investment in this country, can he perhaps on some future occasion bring these figures more up to date? It is sad that they relate to 1975–78 while here we are nearly in 1981.
§ Lord COCKFIELDMy Lords, I shall be very happy to do so as soon as the figures are available.