Anthony Nelson, the trade minister, is to shift policy towards greater emphasis on direct investment abroad by British companies and boosting the City's invisible export earnings.
As well as the traditional roles of promoting exports and encouraging foreign companies to invest in Britain, the Department of Trade and Industry will step up efforts to remove barriers to overseas capital investments made from the UK.
Mr Nelson also plans to put more time into helping the City sell its fee-earning services abroad, including a visit next month to Jakarta, where up to pounds 600m of advisory work on Indonesian privatisations is expected to be up for grabs by international securities firms. The City team will be led by Robin Fox of Kleinwort Benson.
In an interview with the Independent, Mr Nelson described as simplistic the idea that only visible export earnings mattered. He wanted to look at the capital account of the balance of payments as well - which meant inward and outward investment and repatriation of dividends and profits.
Mr Nelson said he was very pleased that there were 220 Japanese companies with manufacturing plants here. But he also wanted to encourage British companies' foreign direct investment which would provide income for the UK.
It was assumed politically that outward investment must be bad because it did not show faith in investment in British industry. However, capital profits on investment abroad were "big ticket business", representing pounds 9bn of Britain's pounds 50bn gross annual income from visible, invisible and capital account trade with the US, where UK investment was pounds 119bn.
Mr Nelson said there was a good case for healthy capital account trade as well as for inward investment to the UK. "If you are minister of trade you ought to be looking at the whole profit and loss account, and not just part of it."
His efforts would be directed principally at trying to open markets such as South Korea, where there were tight restrictions on investment by UK companies, working both through bilateral agreements and through bodies such as the World Trade Organisation.Reuse content