§ Mr. Albuasked the Chancellor of the Exchequer if he will state the amount by which the balance of payments on capital account in 1966 was improved by the measures of control exercised by the Bank of England on overseas investment.
§ Mr. CallaghanI assume that my hon. Friend has in mind the effect of the Government's Exchange Control measures (including the 25 per cent. surrender scheme) and the Voluntary Programme.
The total effect on the capital account was probably in the range of £100 to £125 million in 1966.
The level of direct investment by United Kingdom companies seems to have been little changed between 1965 and 1966, after rising by an average of nearly £25 million a year since records began in 1958. An increasing proportion of that investment was financed from overseas borrowing and only a minimal amount of investment in the non-sterling area was financed from official exchange (£7 million in 1966). Partly also because of the impact of Corporation Tax there were net sales of £90 million of non-sterling portfolio investments including surrenders under the 25 per cent. scheme.