HC Deb 21 April 1994 vol 241 cc605-6W
Mr. Cousins

To ask the President of the Board of Trade if he will publish a table showing(a) direct investment overseas and (b) inward direct investment in cash, US dollar, prices in (i) the United Kingdom and (ii) Germany in each year since 1979.

Mr. Sainsbury

The information requested is set out in the two tables. They show figures for outward and inward foreign direct investment respectively. These figures are net figures. Therefore, inward investment in the United Kingdom is measured by adding up the following flows:

  1. (a) foreign investment in the United Kingdom;
  2. (b) the acquisition by a foreign company of previously United Kingdom-held shares in United Kingdom companies were:
    1. (i) the acquisition leads to the foreign company holding more than 20 per cent. of the United Kingdom firm; or
    2. (ii) where there is an increase of 20 per cent. or more in a foreign firm's share holdings in a United Kingdom company above that 20 per cent. figure;
  3. (c) profit retained in the United Kingdom by foreign-owned companies;
  4. (d) the repayment to United Kingdom companies of loans previously made to their parent/subsidiaries overseas; and
  5. (e) cash injections from foreign companies into their United Kingdom-owned subsidiaries;

and then deducting from this aggregate:

  1. (a) sales of foreign-owned companies or shares in foreign-owned companies in the United Kingdom to United Kingdom residents above the same 20 per cent. thresholds;
  2. (b) profits repatriated from the United Kingdom by foreign-owned companies; and
  3. (c) the repayment by United Kingdom companies of loans made by their overseas parent/subsidiaries.
All the figures in the tables are compiled using an equivalent methodology.

The data come from national sources. Although these are the best sources available, care is needed in the interpretation of the figures. Differences in the definition of foreign direct investment used in the United Kingdom and Germany mean that the data are not strictly comparable. Furthermore, the figures are produced from the results of a sample survey, so both sets are subject to a degree of uncertainty. More recent data are also subject to quite large revisions. Finally, both sets of figures have been converted from the domestic currency into dollars, so exchange rates will have an influence on the dollar figures that emerge.

Year Number of projects submitted Number of projects approved Expenditure in cash terms £ million Expenditure in real terms at 1992–93 prices £ million
1988–89 145 16 8.1 10.4
1989–90 76 83 8.7 10.4
1990–91 72 58 11.8 13.0
1991–92 64 64 20.2 21.0

Flows of Outward Foreign Direct Investment 1979–92 $ billions
United Kingdom1 Germany2
1979 6.4 4.5
1980 7.9 4.0
1981 9.4 3.9
1982 3.7 2.5
1983 5.3 3.2
1984 7.7 4.4
1985 11.1 4.8
1986 17.1 9.6
1987 30.8 9.1
1988 37.2 11.4
1989 35.2 14.5
1990 18.0 23.1
1991 16.5 22.3
1992 17.9 18.0
Source: CSO, OECD.

1 United Kingdom data excludes activities of oil companies before 1984. Includes reinvested earnings.

2 Data before July 1990 relates to West Germany only. Excludes reinvested earnings.

Flows of Inward Foreign Direct Investment 1979–92 $ billions
United Kingdom1 Germany2
1979 3.7 1.7
1980 5.9 0.4
1981 2.0 0.3
1982 2.0 0.8
1983 3.1 1.8
19843 -0.3 0.6
1985 5.7 0.6
1986 8.3 1.2
1987 14.4 1.9
1988 20.6 1.2
1989 28.5 7.1
1990 30.5 2.3
1991 14.4 3.2
1992 16.3 3.9
Source: CSO, OECD.

1 United Kingdom data excludes activities of oil companies before 1984. Includes reinvested earnings.

2 Data before July 1990 relates to West Germany only. Excludes reinvested earnings.

3 The negative figure for United Kingdom inward investment in 1984 represents a net disinvestment by foreign owned companies in that year.