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Mr. Gill: The hon. Gentleman will be the first to recognise that a business man deciding to relocate or make a large new capital investment somewhere bears in mind factors other than whether the United Kingdom is
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in the European Union. Those may include the availability of a suitable work force, the motivation of that work force, the conditions that the Government have created whereby labour relations are better than they have been for 100 years, and whether managers can manage. If we are to have a free and frank, and also constructive, debate this morning, the hon. Gentleman will probably concede those points.
Mr. Bell: Far from merely conceding them, I agree with everything that the hon. Gentleman said. If he continues to make interventions like that, I may make him an offer that he cannot refuse. Perhaps he should come over here and sit next to my hon. Friend the Member for Bolsover (Mr. Skinner).
Mr. Gill: The hon. Gentleman tempts me, but essentially I am a capitalist and those who sit on the Opposition Benches are socialists. There is a huge difference in our philosophies. Our joint aim, however, should be the prosperity of this country.
Mr. Bell: I thought for a moment that the hon. Gentleman was going to call me a capitalist, which would have been a terrible sin against me and especially against my hon. Friend the Member for Bolsover.
Perhaps I may answer the specific point that the hon. Gentleman made. It was an excellent point and it anticipates my speech. I have before me the brochure of Toyota, one of the great inward investors, which says that its decision to locate its European manufacturing plants in the United Kingdom was influenced by many factors, including a reasonably sized domestic market, the tradition of vehicle manufacture, a substantial indigenous parts and components supply sector, good access to the rest of Europe, and the co-operative attitude of national and local government. So I agree entirely with the hon. Gentleman.
Mr. Butterfill:
The hon. Gentleman may find that the Government's co-operative attitude was more important in that decision. The Library's figures--they were not supplied by the Conservative Central Office research department--show that when we took over from the Labour party net inward investment grew from £2.9 billion per year to £5.6 billion by 1986, which was before the decision to sign the Single European Act. So it had much more to do with the fact that we had created a benign environment than with the decision to sign that legislation.
Mr. Bell:
The hon. Gentleman talks of the Government's benign attitude in relation to Toyota, but he should have mentioned the supportive action of the Labour-controlled local authority, which provided the framework and even a village to help Toyota invest in this part of the world. The hon. Gentleman should not rely too much on that research document; he should be a little more cautious.
I will use the figures given by the President of the Board of Trade--as he is here, he will not disavow them. He made it clear that our stock of inward investment is now more than £150 billion, up from £44.3 billion in 1985. We welcome that. Since 1986, therefore, there has
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Naturally, we are not saying that we do not want that investment. We recognise that certain banks in the City of London, such as SG Warburg, Kleinwort Benson and even Barings, have been taken over by way of inward investment. Some believe that outward investment is a good philosophy. Barings invested £800 million of its money in the Singapore trading markets, with disastrous consequences for the company. Companies such as South Western Electricity and Northumbrian Water have been acquired by overseas investors, which have a firm role to play in our domestic economy.
Although the President of the Board of Trade mentioned some of the companies that have invested here, the list was clearly not extensive: Siemens, Fujitsu, Toyota, NEC, Samsung, Honda, Chunghwa and Nissan are but a few. My right hon. Friend the Member for Derby, South was the first to recognise Toyota's input into the local domestic economy, with the creation of 1,970 jobs and £700 million of investment.
We welcome that inward investment but--to return to the point made by the hon. Member for Ludlow--we want to encourage domestic investment as well. The Chancellor said that business investment has been growing at 6 per cent. a year, that he expected it to grow strongly and that he thought that it would grow to 10 per cent. a year. Those are optimistic figures. We hope that they will be borne out by the results, but as my hon. Friend the Member for Bolsover remarked, manufacturing investment in the United Kingdom is still lower today than it was in 1979. It is also lower than it was in 1989.
More can be done in our regions. The White Paper referred to regional development agencies. We want to strengthen the roles of development agencies in Scotland and Wales, and to establish a series of regional development agencies which could co-ordinate economic development and encourage new technology by providing a conduit for new investors.
We congratulate the Invest in Britain Bureau on the work that it has done. Victory has a thousand fathers, as we know. The father of the Invest in Britain Bureau was a Labour Government, who set it up way back in 1977. The President of the Board of Trade likes to paint a bleak picture of what life was like in 1979--like a Flemish landscape in the middle of winter.
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Mr. Skinner:
We had a surplus then.
Mr. Tim Smith:
If things were going so well in 1979, can the hon. Gentleman name one significant inward investor, apart from De Lorean, in the period of the Labour Government?
Mr. Bell:
De Lorean was an inward investment in Northern Ireland, which was part of our policy of investment in our regions. Samsung was in our country at that time, as were Merck Sharpe and Dohme, the American pharmaceutical company, and Sony. Ford expanded. The litany goes on and on. The hon. Gentleman should be careful: we could spend the rest of the debate listing companies which invested in our country at that time. I am sure that the President of the Board of Trade would accept that the United States invests more money in the UK than anywhere else in the world, and it has been doing so since the 1930s at least. We are, have been and will be--under a Labour Government or even under a Conservative Government--a country with high skills in the work force which are always attractive to companies seeking to invest.
We congratulate the Invest in Britain Bureau within the Department of Trade and Industry which works closely with the Locate in Scotland office, the Welsh Development Agency and the Industrial Development Board for Northern Ireland. The intervention of the hon. Member for Beaconsfield helps me to refer to Northern Ireland. In debates such as this, we rarely mention it. We are the United Kingdom and I am often surprised that Government documents refer to Britain, which so far as I am aware means England and Wales. The United Kingdom covers Northern Ireland--[Interruption.] Scotland is part of Great Britain.
We welcome inward investment for Northern Ireland. We welcome the trading capabilities of Northern Ireland and want them to be further developed. We want to expand regional development organisations and the link with the Foreign Office. We are grateful to the President of the Board of Trade for telling us that the Government are implementing Labour party policy, in anticipation. In our documents to our party conference last autumn we stated clearly that we wish to strengthen the link between the Department of Trade and Industry and the Foreign and Commonwealth Office.
The right hon. Gentleman mentioned our embassies abroad as focal points for our exports and outward investment. I remind him that a month ago President Chirac brought every French ambassador to the Elysee palace and told them that they were ambassadors for their country not only in diplomatic affairs, but for trade. The French still export more than we do: they are the world's fourth largest exporter while we are the fifth.
Mr. MacShane:
They have a trade surplus.
Mr. Bell:
Indeed. France has a trade surplus of $18 billion, while the UK Chancellor of the Exchequer congratulated himself in his Budget because he thinks that we might be in balance on current account.
Mr. Lang:
We are exporting at a faster rate than France. Does the hon. Gentleman concede that since 1981 we have closed the gap?
"what percentage of inward investment in 1995 was due to the acquisition, takeover or merger of a United Kingdom company by overseas investors?"
The President replied:
"In 1995, acquisitions, takeovers and mergers accounted for around 25 per cent. of foreign direct and portfolio investment into the UK, based on UK balance of payments data."--[Official Report, 12 June 1996; Vol. 279, c. 182.]
I am seeking to get a balance into this debate. The point is that 25 per cent. of that inward investment is simply money turning around and changing hands, not productive investment.
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