Jason Ford

CBI calls for action to get investment into the UK

News

The CBI has called on the government to improve Britain’s attractiveness to investors, warning that without action, investment and jobs will be lost to other countries.

With public and consumer spending constrained, business investment will play a critical role in driving any recovery. But foreign investment in the UK fell during the global recession, from $186.4bn (£114.5bn) in 2007 to $45.7bn (£28.07bn) in 2009, and the UK’s reputation as a good place to invest is said to be under threat.

In a new report called Making the UK the best place to invest, the CBI identifies the main drivers and blockers for investment, based on research from 400 companies, including interviews with senior business leaders.

The report suggests that much more needs to be done to improve the investment landscape to retain companies based here and attract fresh inward investment.

It follows a CBI and Deloitte survey of 121 senior business leaders last October, which found that between eight and 12 per cent of companies have not yet decided where their primary location will be in five years.

Commenting on the UK’s attractiveness as an investment location, business leaders highlighted a range of issues, including the tax regime, regulation, planning and infrastructure.

‘Our investment decisions are taken with a long-term view, so stability of government commitment is important,’ said Andreas J Goss, chief executive of Siemens UK. ‘Broad support for policy direction such as promoting the shift to a low-carbon economy makes the UK attractive to business. A serious risk is the lack of engineering and science skills, vital for the innovation needed to be competitive in a global market.’

When asked about the upsides of investing in the UK, business leaders cited the country’s science base, particularly in research and development, and innovation, highlighting that four of the world’s top-10 universities are located in the UK.

Barriers to investment, however, include the £0.50 personal tax rate; skills shortages, particularly in science, technology and mathematics; the planning system’s ability to deliver timely decisions alongside the government’s localism agenda; and the impact of regulation, particularly employment legislation around tribunals, dismissal periods and strikes.