HL Deb 30 October 1986 vol 481 cc898-9WA
Lord Orr-Ewing

asked Her Majesty's Government:

Whether they will clarify the scope of the voluntary ban on new investment in South Africa to which they agreed at the Commonwealth Heads of Government review meeting in August and the action they are taking now that the member states of the European Community have adopted a similar measure.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)

The member states of the EC have agreed that the measure will cover new direct investment in the RSA by natural or legal persons resident in any member state. In accordance with this and our undertaking at the Commonwealth Heads of Government review meeting, the British Government are taking action to dissuade UK firms from making new, direct investment and to ask all the companies concerned to comply fully with this measure.

Under the terms of the intergovernmental decision agreed by the member states of the EC, new direct investment includes new acquisitions of share and loan capital of South African companies, and also includes loans and capital injections through intercompany and branch/head office accounts.

Financial transactions and bank lending in support of normal trading activity are not included. Also excluded are investments in training, health and social sectors in line with the positive measures agreed in the EC last year and this.

I believe that British industry, which has repeatedly supported calls for fundamental social and political reform in South Africa, is ready to play its part in helping to bring this about by non-violent means. Given the extent of existing UK in0vestment in South Africa, wholehearted co-operation by British companies with the voluntary ban of new investment should have considerable impact.

Meanwhile, if the South African Government were to take those steps for which we and our partners have called, in order to establish a process of dialogue across racial lines, we have made clear, in the Commonwealth communiqué, that we stand ready to review and if appropriate to rescind the measures we have adoped.