Lord Hawkeasked Her Majesty's Government:
What is the estimated yield in dividends and interest on the many thousands of million pounds which have been invested overseas by British financial institutions since the abolition of exchange controls; whether these fruits of investment are included in the estimates of invisible exports and if not why not.
§ Lord LyellEstimates of the yield on financial institutions' overseas portfolio investments are not available. From official statistics it is only possible to make a very rough comparison of annual earnings and the market value of portfolio assets.
Estimates of total annual earnings by financial institutions from portfolio investment overseas are published in the City table (Table 6.1) of the United Kingdom Balance of Payments "Pink Book" 1982 edition, and amounted to £550 million in 1981. They cover dividends and interest, but not capital gains, from all such investment, including investment made prior to the abolition of exchange controls. They are part of total United Kingdom earnings of interest, profits and dividends, which, in turn, are included in United Kingdom invisible earnings in the balance of payments accounts.
The estimated market value of all United Kingdom portfolio assets overseas is published in Table 11.1 of 90WA the "Pink Book", and amounted to £16.5 billion at end-1980 and £22 billion at end-1981. Of these assets, about 80 per cent. were held by United Kingdom financial institutions. Estimates for 1982 are not yet available.