Invisible Earnings

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 21st April 1970.

Alert me about debates like this

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West 12:00 am, 21st April 1970

asked the Chancellor of the Exchequer by what amount the intensification of controls on United Kingdom investment overseas imposed since October, 1964, will reduce future invisible earnings.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

It is not possible to quantify the difference in invisible earnings likely to arise from the different method of financing overseas direct investment resulting from the controls imposed since 1964. All I can say is that such investment is at present running at about twice the rate it was in 1963 and 1964.

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

Was not the favourable balance of payments aided greatly by the overseas investment made in and before 1964? Surely the right hon. Gentleman should endeavour to measure the loss that we shall suffer due to restrictions imposed upon this valuable source of invisible earnings in future?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

I am sure that the hon. Gentleman could not have heard my reply. I am saying that, compared with 1963 and 1964, investment of this kind is running at about twice the rate.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

Since, from the Government's own figures, it appears that portfolio investment abroad last year by United Kingdom residents was only £2 million compared with £233 million the year before, does not the right hon. Gentleman anticipate some falling off in income from this source?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

The hon. Gentleman is now talking about portfolio investment which has produced, as a result of the 25 per cent. surrender scheme, an annual benefit to the reserves of the order of 200 million dollars to 250 million dollars a year. That is very substantial assistance to the balance of payments which must cause hon. Gentlemen opposite to rejoice, as we have all observed. I recognise that there will be a falling off in future earnings as a result, but the immediate benefit is very considerable and the falling off very small in the early stages.