Certainty is key to boosting UK foreign direct investment
When I published my Review on Foreign Direct Investment last November as commissioned by then Chancellor, Jeremy Hunt, one of the key recommendations was that businesses needed the certainty of policy continuity to invest in the UK.
You may think that one of the most seismic political shifts in Government in a generation would be a significant hindrance, but as I laid out in a Lords debate on the subject last week; it certainly doesn’t have to be.
This is because not only were my recommendations accepted by the previous Government and supported by the now Business Minister, but because it is not the ideological beliefs of any Government on tax or growth, nor necessarily availability of money. Instead, it is how Government functions where the UK can best change to secure a bigger slice of Foreign Direct Investment.
Having spoken to hundreds of businesses, institutions and Sovereign Wealth Funds through the course of my Review I know that the rewards are significant, and the ask is simple: that businesses want the Government to act more like a business.
That means certainty of projects and priorities for investments, not constantly changing deadlines and cancelled infrastructure projects. They want a simple route to accessing finance rather than jumping through hoops across several different funds, pots and departments. And they want a one-stop shop that can provide the myriad of factors they need to invest.
If another country can provide them with access to the grid, visas, support for supply chain and funds through one Government body, that is where they will invest, and that is why so many companies are looking abroad.
The last Government got that, and I believe that this one does too, however it requires action rather than warm words of support. This is why I held a debate in the Lords last week, calling on the Government to take action on key recommendations:
Firstly, the establishment of a Cabinet Level committee to identify a Government Investment Strategy, to set out to business the priority areas to attract investment that will deliver growth in the UK.
Secondly, the appointment of a Cabinet level Investment Minister who can hold different departments to account to overcome the current obstacles facing business including funding, planning, visas and skills and create an attractive investment package for foreign investors.
Thirdly, the expansion of the Office for Investment. Rather than expecting a team of around 25 well intentioned Civil Servants to secure all the Foreign Direct Investment we need, to resource it fully to act as a secretariat for the Cabinet Committee and actively pursue the investments we want.
Together, the above can provide the ‘one stop shop’ that business needs and that the countries we compete with can provide.
I welcomed the encouraging words of support of these initiatives from the new Minister, and his detailing of Labour’s plans to remove the shackles to growth. However too much is summed up in his response to the question of a Minister for Investment – an announcement in due course.
Investors have been waiting for due course for too long. My Review sets out a clear and simple plan for action- and I will continue to hold the new Government to account for delivering it.
Richard Harrington, Baron Harrington of Watford, is a current member of the House of Lords. He previously held ministerial roles in the Boris Johnson, Theresa May, and David Cameron governments.
