We are facing a battle to decide the economic future of the UK. Some oppose the sale of any iconic British brand or building to foreign buyers on the basis that it is some sort of defeat. They want to erect barriers to foreign investment, “protect” British companies, expropriate utilities owned by foreign pension funds and build a state directed economy.
This prescription for the UK flies in the face of history and our own experience. Since 2010 successive Conservative prime ministers have gone in the opposite direction and sought to make the UK the most liberal and open economy in the world. The UK has become the most attractive major economy and hosts more foreign direct investment in companies than any nation on earth excepting only the US and China. Foreign companies have invested more in the UK than in Germany, Spain and Poland combined.
In 2018 FDI stock in the UK rose by another 5pc to a record $1.9 trillion (£1.5 trillion) helping to deliver the lowest level of workless households since records began, the lowest ever level of youth unemployment and a higher percentage of people in work than the US, Germany or France.
Capital investment in regeneration projects does not feature in FDI (which only records investment of more than 10pc of UK companies) but is another successful feature of the investment friendly environment so painstakingly constructed by successive Chancellors. A shining example of this is the ongoing Battersea Power Station redevelopment, which I recently visited in London.
The 42-acre redevelopment will see the creation of 4,239 flats along with commercial space for shops and businesses, a public park, a town square and a new tube station. The project is being developed by Permodalan Nasional Berhad – one of the largest asset management companies in Malaysia and the Employees Provident Fund of Malaysia together with Malaysian developers Sime Darby Property and SP Setia.
So Malaysian capital, inspiration and expertise is being harnessed to transform a landmark site in the heart of London. After a number of previous stalled attempts the iconic structure is being repurposed for the 21st century, ensuring those world-famous chimneys retain their place in London’s skyline.
In an example of how foreign investment can galvanise further confidence, the former power station has attracted Apple to take on 500,000 sq ft of office space, reinforcing their choice of the UK as their investment location of choice.
The Malaysian investment will produce many more benefits. Locally there will be a new town centre for Battersea and Nine Elms and, in partnership with the Government, two new underground stations and an extension to the Northern Line.
Overall the regeneration of the power station is forecast to inject £20bn into the UK economy and create 20,000 new jobs. The impact of this investment will be felt across the UK starting with locally based national businesses in south west London but reaching smaller businesses across the land. The roughly 1.3m handmade bricks used to restore the power station are the product of Gloucestershire-based Northcot Brick using the original moulds. The UK’s largest family-owned steel fabricator, William Hare Ltd. is responsible for providing the 24,000 tons of steel used to build the frame of the power station, from fabrication to installation.
The development’s success illustrates the positive impact on business and communities that capital investment in British infrastructure, goods and services can provide.
Not only does investment of this kind create jobs locally and nationally, it also plays a key role in deepening trade ties with key markets around the world. More than 57pc of the UK’s inward investment stock comes from countries outside of the EU, including the US, Japan, Hong Kong, Singapore and Brazil, which additionally provide opportunities for UK exporters.
Investors have many choices as to where they put their money. We need to reinforce not dismantle those things which make the UK attractive. The UK has a fundamentally strong economy, a government which supports enterprise, a highly skilled talent pool, the world’s most respected legal system, many of the best universities in the world, a place in the top 10 for ease of doing business and competitive tax rates. Start to mess with these and business and the prosperity and jobs which accompany it will go elsewhere.
We need to do a better job of explaining how our business environment has contributed to the turn around in opportunity which has occurred over the last decade. Forbes recently named the UK as the best place in the world for doing business (for the second year running) and, according to an EY report, a survey of global business leaders found the UK to be the most attractive destination for mergers and acquisitions knocking the US off that perch.
London is not the only destination in the UK that is thriving. The capital is facing competition from cities such as Leeds, Cambridge, Dundee, Belfast, Manchester and Cardiff.
Our success is, understandably, making our competitors raise their game. President Macron in France is one of many who is spending more and doing more to attract investment. If we are to maintain our position we will need to become more, not less, competitive and expand our global marketing efforts to hold off the attempts of Paris, Dublin, Amsterdam and Frankfurt to grow market share.
After nearly a decade of rebuilding, the UK economy is delivering rising incomes, growing tax receipts, record funding of the NHS and an enterprise economy which can deliver opportunity for all. Our openness to foreign capital, talent and expertise has played a major part in making the UK a better place to be.
As we leave the EU we should be confident of our future. We will be a sovereign nation once again but open for business and determined to build a global Britain.
Graham Stuart | The Telegraph