Inward Investment

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 Harry Greenway Mr Harry Greenway , Ealing North 1:49, 19 March 1997

To ask the President of the Board of Trade how much inward investment has come to the United Kingdom in each of the past three years from (a) the United States of America, (b) Japan, (c) Germany and (d) other countries; how many jobs have been created as a result; and if he will make a statement. [19449]

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

In 1992 to 1994, the last three-year period for which comparable data are available, inward investment from the United States of America amounted to £11 billion, from Japan nearly £200 million, from Germany £2 billion and nearly £12 billion from the rest of the world. Those figures are taken from the Organisation for Economic Co-operation and Development "International Direct Investment Statistics Yearbook 1996".

Invest in Britain Bureau records show that about 215,000 jobs have either been created or safeguarded by projects announced over that period.

Photo of Mr Harry Greenway Mr Harry Greenway , Ealing North

Does my right hon. Friend agree that those are brilliant figures, which are attributable to the success of this Government's policies, in huge contrast to the policies of the predecessor Labour Administration, although that was a long time ago? Is not the Government's attitude to enterprise that which the Governments he mentioned most want? That is why the money comes here. Does he agree that that is in contrast to the policies and thrust of the Labour party, which would decimate those figures within a short time if ever a Labour Government were elected, which they must not be?

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

My hon. Friend is absolutely right. Those figures represent the world's verdict on the United Kingdom as an attractive location for investment—an enterprise-friendly location with low corporate taxation; good communications and infrastructure; a good, skilled, productive work force; and a commitment to helping to make projects a great success. The threat that hangs over inward investment as a result of the Opposition's policy agenda cannot be exaggerated. The burdens of the social chapter and the European social model would destroy jobs and frighten off inward investment, just as they have in the rest of Europe.

Photo of Dr Norman Godman Dr Norman Godman , Greenock and Port Glasgow

I welcome that investment, but may I remind the Secretary of State that, where American investment is concerned, IBM came to Greenock more than 45 years ago, largely at the prompting of the local Labour Member of Parliament, Hector McNeil? As the right hon. Gentleman well knows, IBM is still a major employer in the west of Scotland. Since then, there have been many other inward investors, but does he agree that not enough of them are setting up research and development facilities? Locate in Scotland, Scottish Enterprise and his Department are failing to persuade investors to set up research and development centres.

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

I acknowledge the fact that IBM has been here for getting on for half a century. It is one of 4,200 American companies that have located in the UK. I do not agree, however, with the hon. Gentleman's point about research and development activities. The quality of investments coming to the United Kingdom has risen substantially in recent years, and a substantial proportion are not only reinvestments and expansions by existing companies, but associated with some research and development. Indeed, the strength of our academic institutions has been one of the other factors that has attracted such investment, but it could easily be frightened away by the policies of an incoming Labour Government if they abandoned the enterprise-friendly, low corporate tax policies of this Government, which have been so successful in encouraging our competitiveness and attracting investment.

Photo of Mr Robert Atkins Mr Robert Atkins , South Ribble

Is my right hon. Friend aware that many of the reasons why Isuzu decided to invest in a joint manufacturing operation with Leyland Trucks in my constituency, employing many of my constituents and those of my hon. Friend the Member for Chorley (Mr. Dover), were the reasons that he just enunciated—a low-cost economy that is successful as a direct result of Conservative policies, which must continue if the likes of Isuzu are to come here again?

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

My right hon. Friend is right. Japanese investors set demanding targets for productivity and efficiency. They have recognised the strength of the United Kingdom, which is why we are securing in the present year more than half of all the Japanese investment in the European Union.