General Implementation of Treaties

Part of Bill Presented – in the House of Commons at 12:00 am on 3 May 1972.

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Photo of Mr John Nott Mr John Nott , St Ives 12:00, 3 May 1972

I will show how. First of all our investment on the Continent is considerably greater than the investment of the Six in the United Kingdom. This was what the right hon. Gentleman was referring to in an earlier intervention. Moreover, the impending absence, as we move further, of tariff barriers will enable British factories to expand their facilities at home, thereby encouraging employment here which would otherwise, to overcome tariff barriers, necessarily have to be built abroad. I know of many examples—and I have been a member of the Government for only a few weeks—of this happening, the deferment of plans to build a plant on the Continent and the expansion of facilities within the United Kingdom because companies now know that they will not have to overcome a tariff barrier.

The more likely eventuality, rather than an outflow of direct investment to the Community, is surely a strong upsurge of EEC investment here which would provide considerable benefit to our balance of payments, our employment and our incomes. In this respect we should not forget American investment, which should be attracted here by our common language, comparable capital markets and legal system. It has tended over the years to drift towards the Community, to the larger market of the Six. There is every reason to expect that when we enter the Community there will be a reversal of this trend. I need not remind hon. Gentlemen of the valuable contribution provided by foreign-owned companies in bringing new employment to assisted areas and providing up to one quarter of our current exports.

7.30 p.m.

[Sir ALFRED BROUGHTON in the Chair]

The right hon. Gentleman referred briefly to the plans for economic and monetary union. He has often previously referred to this matter in the Committee. I do not want to touch upon it now more than to say that he implied that in some way common currency and unified decision making were somehow just around the corner. But, as the right hon. Gentleman knows, economic and monetary union is an objective which the Government share with the previous Administration, of which he was a member, but it is not, on any reckoning, a near prospect. As has so often been repeated, we shall be full members of the Community and we shall be participating in all discussions and decisions on this issue.

My hon. Friend the Member for Banbury referred to the narrowing of exchange margins. I hope that in considering this matter my hon. Friend will bear in mind that before December of last year the maximum permissible margin under IMF rules was 1 per cent. each side of parity. compared with the 2¼per cent. each side of the central rate now. We still have a wider band than was the case before December last year.