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Oral question asked in the House of Lords, by Lord Leigh of Hurley (Conservative). It was answered on Wednesday, 25 May 2016.

Economy: Overseas Trade Deficit

Question

My Lords, the Minister is right to say that the deficit is caused by the imbalance in FDI. Does he agree that the way to address this is to encourage industry to divert investments away from low-yield FDI into high-yield areas, such as China, which currently represents less than 1% of our overseas investments abroad?

Answer

I am very grateful for the accurate suggestion by my noble friend Lord Leigh as to what is really going on below the data. I emphasise—as, rather generously, Ernst & Young did yesterday in a very important report—that the recent deterioration is

due to the growing attractiveness of the United Kingdom, especially areas outside London, in the minds of investors all over the world. Narrowing this deficit requires us to invest more in other places in the world that give a higher return.

Secondary information

Type
Oral question
Reference
773 c383 
Session
2016-17
Oral question type
Supplementary
Chamber / Committee
House of Lords chamber
Subjects
Balance of payments
Link
View this Oral question on hansard.parliament.uk