Oral Answers to Questions — Trade and Industry – in the House of Commons at 1:49 pm on 19 March 1997.

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Photo of Mr David Shaw Mr David Shaw , Dover 1:49, 19 March 1997

To ask the President of the Board of Trade if he will make a statement on the benefits to the United Kingdom of (a) inward and (b) overseas investment. [19447]

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

overseas-owned companies provide a third of all manufactured investment in the UK, nearly a fifth of manufacturing employment, over a fifth of manufacturing output and around two fifths of UK manufactured exports. The United Kingdom is itself the second largest outward investor in the world, receiving substantially more income, interest and dividends from its ownership of companies overseas than is paid out to those overseas who own companies in Britain.

Photo of Mr David Shaw Mr David Shaw , Dover

Will my right hon. Friend confirm that this is an extraordinary account of the success of the Conservative Government? There is no question that our inward investment has created an enormous number of jobs, and our outward investment has helped not only with jobs in this country, but resulted in one of the greatest dividend flows into this country since the second world war. We are enormously better off, and pensioners have benefited because a lot of the money that comes back to this country does so in the form of dividends, which go into pension funds.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

My hon. Friend is right, and it is remarkable that this country is the second largest in the world—after the United States—in terms of both outward and inward investment. Our outward investment stock is valued at more than £200 billion, and generated earnings of £24 billion to this country in 1995. We have an exceptional inward investment record, and a large number of companies from around the world are locating in this country because we deliver quality goods at competitive prices. In doing so, we have generated a substantial extension in employment.

Photo of Denis MacShane Denis MacShane , Rotherham

What does the Secretary of State have to say about the decision of Toyota, announced this week, to build its new car plant in France? This follows hard on the heels of Ford switching production and jobs from Liverpool to Germany and Spain. Has not much of our inward investment in recent years been on the basis of Britain being fully in Europe? Is not the message now to the boardrooms of the world that the Tory Cabinet is divided on, and hostile and opposed to, Europe? Until we drain the poison from the "Euroseptics" in the Cabinet and replace them with a Government committed to working and playing a leading role in Europe, more and more companies like Toyota and Ford will turn their backs on the UK.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The hon. Gentleman is talking absolute nonsense. Toyota has taken no such decision and, along with Nissan, Honda, Ford and others, has reinforced its commitment to this country year after year with massive investment. Toyota is in the process of creating more than 1,000 jobs in Derbyshire as a result of massive investment. We have attracted more than 40 per cent. of Japanese investment in Europe, and that figure will rise—it is running at 56 per cent. in the current year. That is a measure of the strength of the United Kingdom which, under a Conservative Government, is one of the most attractive places in the world to invest.