Govt. Letter To Industrialists

Press, Volume CV, Issue 31057, 12 May 1966, Page 6

Govt. Letter To Industrialists

CN.Z./.A. Reuter—Copyright) LONDON, May 10. The British Government today asked Britain’s business giants to cut down the flow of British capital feeding industrial enterprises in Australia, New Zealand, South Africa and the Irish Republic.

The Chancellor of the Exchequer, Mr James Callaghan, announced in his Budget speech a week ago that he would appeal for a voluntary slowdown of capital sent from Britain to developed countries of the sterling area.

Today he wrote personally to the chairmen of more than 200 British companies which between them provide more than 90 per cent of Britain’s investments in the four countries.

Mr Callaghan asked them to consider whether any intended investment plans would bring a substantial and continuing benefit to Britain’s balance of payments within two or three years. In his letter to industrialists, Mr Callaghan said: “In present circumstances the resources which the nation can afford for overseas investment are limited. “For the time being we need to concentrate our

efforts on those types of investment which will be of most immediate benefit to our balance of payments. “Other types of overseas investments, desirable though they may be in the longer run, must be deferred—unless the funds for them can be raised abroad —until the nation can fully meet the cost. Otherwise we put ourselves increasingly in debt.” Mr Callaghan said that an investment which he regarded as being a benefit to the balance of payments could involve the starting up of a new and continuing stream of exports, or an exceptionally large and rapid return of profits earned and remitted from the investment —or a mixture of both. He.added: “I should like you to consider first whether you can postpone any of your plans for the time being. Second, I hope you will make every effort to find finance from outside this country for any projects which in your view cannot be postponed.”