§ Mr. Ridley
asked the Chancellor of the Exchequer if he will set out, for the years 1964 to 1968, inclusive, the various sources of finance making up the net total of United Kingdom investment overseas, direct and portfolio, showing the extent to which each source of finance affects the United Kingdom reserves and sterling liabilities.
§ Mr. Taverne
I would refer the hon. Member to the reply given to the hon. Member for Farnham (Mr. Maurice Macmillan) on 12th November, 1969, which gives an analysis distinguishing investment not involving direct remittances from the United Kingdom and other components of investment.34W
A broad indication of the direct effect of net investment in the non-sterling area upon the United Kingdom reserves is provided by the combined figures for the items "Net disinvestment under the 25 per cent. surrender scheme" and "Remainder (net)" shown in the table given in that reply.
The direct effect of net investment in the overseas sterling area on the reserves or in external liabilities in sterling may be taken as broadly equivalent to the item showing remitted investment in that area. In 1968, however, these remittances were partially financed by identified overseas borrowing of some £15 million.
Investment which does not involve direct remittance may still be tantamount 35W to an outflow and thus be held to affect the reserves. The main element of such investment is that financed through unremitted profits. Figures for these are also given in the reply referred to.—[Vol. 791, c. 118–20.]