§ Mr. Leeasked the Chancellor of the Exchequer what was the total value of the capital outflow to the other Common Market member countries for the five-year period 1973 to 1978; what percentage of that outflow found its way into manufacturing industries operating in competition with 12 British manufacturing industries most significant in terms of exports; and if he is satisfied that none of the extra foreign investments so provided has had any detrimental effect upon the rival British competitors.
§ Mr. Robert SheldonI assume that my my hon. Friend's question relates to direct investment in the EEC by United Kingdom residents. The total net value of new direct investment—excluding investment by United Kingdom oil companies—was £519 million in 1973, £364 million in 1974 and £151 million in 1975. Estimates for 1976 and 1977 are not yet available. Current exchange control rules, however,596W ensure that the great majority of direct investments outside the scheduled territories are made without a call on the United Kingdom reserves: they have to be financed not with official exchange but, for example, by foreign currency borrowing or the use of allowed profit retentions.
Since March 1974, official exchange has been available only for projects which directly promote United Kingdom exports and promise a rapid and continuing return to the United Kingdom reserves. So the question of a capital outflow creating competition with our exports would not normally arise.