asked the Minister for Finance the estimated outflow of profits from grant-aided foreign industries in 1985; and if he will comment on the effectiveness of his proposal to sell Government securities to such companies in the light of the continuing high level of repatriation of profits.
Ceisteanna — Questions. Oral Answers. - Outflow of Profits.
35.
It is not possible to give a separate figure for the outflow of profits only. However, the figure for the estimated outflow of profits, dividends and royalties in the first half of 1985, the latest period for which information has been published, is £658 million. The amount relating to grant-aided foreign industries is not separately identified within this total.
The possible terms for the issue of tax free securities to foreign owned companies, in accordance with the enabling provisions in the 1985 Finance Act, have been under investigation by my Department in consultation with the interests concerned. I expect to take decisions in this matter very shortly.
In view of the fact that the estimated outflow on the basis of the half yearly returns of £658 million will be well in excess of £1,000 million by the end of the year and in view of the continuing growth of the "black hole" in our economy, will the Minister acknowledge that the arguments we put forward to him when the scheme was introduced to stem the outflow of these much-needed reinvestment funds should be acted upon? Is it not time that the Minister in the forthcoming Finance Bill ensured that the measures we proposed, and which many sectors in the industry proposed to him, are adopted to stem this growing outflow which is a matter of grave national concern and consequence, over £1,000 million each year?
No, I do not accept any of that. The figure has not been over £1,000 million in any year.
It will be.
The figure for the first half of this year appears to have been due largely to an unusually high figure in the second quarter. It was commented on in the media and that figure may reflect export receipts earned some time before that. In fact, the exports of the leading sectors were particularly buoyant in the fourth quarter of last year and in the first quarter of this year. There may be a number of other special factors at work such as proposed changes by the United States in the double taxation arrangement and expectations about exchange rate movements. I would counsel the Deputy against rushing in and making claims about the significance of these figures without having looked at the factors that may explain them. I should like to know if the Deputy is suggesting that, now that we have attracted a number of foreign enterprises on the basis of the tax system and the other measures we had in force at the time we attracted them here, we should tear up those rules and adopt a different approach.
I did not say that.