UK needs to work harder for investment – CBI
THE UK is facing increasing competition as a destination for business investment and, although it is starting from a strong base, will need to work hard if it is to maintain its position, the CBI said today.
The business group said if future growth was to be assured, the UK had to adapt and improve its policies to recognise the concerns of investors.
Ahead of its flagship annual conference today (Monday), the CBI unveiled the findings of new research on The UK as a place to invest, which highlights what matters most to would-be investors and likely patterns of investment during the next five years.
On behalf of the CBI and Deloitte, the professional services firm, Ipsos MORI carried out 121 telephone interviews with senior business leaders in FTSE 100 & 250 companies, and equivalent large overseas companies operating here.
In order to identify which issues the Government should prioritise, the survey set out to understand how attractive the UK is to investors, how it compares with other investment locations in both mature and emerging markets and what matters most to key decision makers.
In a number of areas considered to be critical to investment decisions, the UK performs relatively poorly, and in recent years the UK’s position is seen as having slipped. The CBI/Deloitte survey identifies four key areas requiring attention: regulation, business taxation, personal taxation, and planning and infrastructure. The one factor seen as important against which the UK performs well is economic stability.
Other areas, where the UK was rated more highly, were seen by investors as less influential. These include historical legacy, such as existing investment and networks surrounding a business.
Evidence about trends in future investment shows that, if action is not taken, investors will be more likely to reduce their presence in the UK, as the primary location for their business shifts abroad. This is particularly the case in design, marketing & brand development, and services provision, areas traditionally considered to be strengths of the UK.
On a positive note, the survey shows many companies (between 8% and 12% across the sectors) have still not decided where their primary location will be in five years’ time. So if the UK sets the right policies now, it can not only maintain its position but it can attract additional activity to the UK.
According to the survey, the coalition Government seems to have made a promising start. The majority of respondents (62%) believe that the new administration will improve the overall climate for business: 55% believe the impact the coalition will have on the business climate will be ‘fairly positive’, while 21% said there will ‘no change’.
Respondents put the UK ahead of continental Europe and Russia as a place to invest, and on a par with Brazil and Asian countries other than India and China. However, the UK is currently perceived to be less attractive than North America, China and India.
Richard Lambert, CBI Director-General, said: “Having acted fast to tackle the deficit, the Government must now focus on how to attract more investment to the UK, if we are to create new jobs and grow the economy.
“The UK is still perceived to be an attractive place to invest compared to many other countries, but is seen to have lost ground in recent years, and as lagging behind the US, China and India. The UK needs to improve in the areas that really matter, otherwise other nations will steal a march on the UK as a place to invest.”
