Orders of the Day — FINANCE (No. 2) BILL

Part of the debate – in the House of Commons at 12:00 am on 10th May 1965.

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Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee 12:00 am, 10th May 1965

I think I had better get on. We shall have plenty of time in Committee. I promise the hon. Gentleman that we shall deal with this in Committee.

I wish to say two further things, one on developing countries. I must point out that the level of private investment in the developing countries has regrettably been declining year by year. In 1960 it was as much as £90 million a year. By 1964 it had gone down to £45 million a year. Part of it is a reflection of the high rates of taxation. That again we must pursue later.

One final point on exports. I am told that it is necessary to invest large sums of capital overseas to get exports. I do not deny the connection. There is a connection, but a great deal too much has been made of this point. I will quote six figures to the House and hon. Members can consider them between now and Committee. Our exports in the last five years have gone up by less than 30 per cent. The Germans have increased their exports by about 60 per cent. The Japanese exports have gone up by about 90 per cent.

As regards overseas investment of capital, the Japanese have invested overseas in the same period £160 million; the Germans have invested overseas in the same period £230 million, and Britain has invested in the same period overseas £1,270 million. Of course, there is a connection between exports and overseas capital, but if Germany and Japan can push up their exports like that with miniscule amounts of capital investment overseas, surely it is ridiculous to suggest that we have to go on pouring out overseas capital chat we can ill afford in order to achieve a result that is nothing like as good.