HC Deb 18 February 1980 vol 979 cc50-1W
Mr. Austin Mitchell

asked the Chancellor of the Exchequer why he believes that overseas investment should help United Kingdom exports; and whether (a) he believes that such help is likely to outweigh the losses incurred as a result of investment in production outside the United Kingdom to supply this country and other markets with goods which have been, are being or could be produced here, and (b) if he will amplify his statement that overseas investment will strengthen the international trading position of the United Kingdom generally.

Mr. Lawson

Much overseas investment will result in the direct export of parts, components, capital goods and other equipment from the United Kingdom; this will be true of both overseas investment in manufacturing and overseas investment in other sectors. In addition, overseas investment in marketing and distribution will have a direct impact on stimulating United Kingdom exports.

Only a small portion of overseas investment is likely to result in production being displaced from the United Kingdom. Almost half of investment overseas has been in non-manufacturing sectors such as banking, mining and distribution: this investment is very unlikely to have been competing directly with domestic investment. Over a quarter of investment overseas has been in countries which operate substantial restrictions against United Kingdom exports and where, in the case of manufacturing investment, this was probably the only means of obtaining or retaining access to the market in question.

Of other overseas investment by manufacturing industries, some will have been in the production of goods which for various reasons it would not be practicable to supply from the United Kingdom and some will have been in essential local distribution and servicing. It is not possible to quantify how much investment was in each of these activities.

Overseas investment in transport and communications, in shipping, in marketing and distribution, and in banking and insurance and other related services all help to strengthen the international trading position of the United Kingdom.