Russell Lynch: Liam Fox shouldn't count his chickens over foreign investmentComments Off on Russell Lynch: Liam Fox shouldn't count his chickens over foreign investment
Let’s hope Liam Fox, our new international trade Secretary, doesn’t get his fingers burnt with boasts over the number of foreign firms ready to splash out over here.
Fox, an avowed Brexiteer, says the UK “continues to be the place to do business” after figures from his department showed 2213 investments made in the year to March, an 11% rise on the previous year.
Up to a point, Lord Copper. The obvious caveat is that these investments were made nearly three months before the Brexit vote, and their value is also unknown. It’s premature to use them as evidence for the country’s continued attraction as a home for foreign cash. And for all Fox’s comments that we’ve “broadened our reach with emerging markets”, the fact is that the US still accounted for more than a quarter of those investments.
The pound’s slide since the referendum certainly increases our appeal to foreigners, as SoftBank’s £24 billion swoop for ARM Holdings shows.
But those “10% off” signs are mightily offset by more than two years of uncertainty ahead when Theresa May finally gets around to triggering Article 50 and the formal process of leaving the EU begins.
Doubt over the exact form of our exit is all but certain to damage business confidence when the negotiations begin to find a messy compromise which limits freedom of movement as well as our access to the EU’s single market.
But hundreds of the high-growth “gazelle” companies surveyed by private-equity firm ECI have put that very access to the single market at the top of their list.
Even though they’re still willing to invest in their businesses, they’re desperate to keep hiring EU workers and also worried about a downturn.
One of them, Emma-Jane Packe, managing director of the Supper Club networking group for entrepreneurs, says “our members are most concerned about declining inward investment”.
We’ll know more in a few months’ time. In the meantime, Fox should ponder Packe’s words carefully.
CBI director-general Carolyn Fairbairn says the Government should take the bankers “off the naughty step” to ward off post-Brexit rivals to the City and “send a signal that a chapter of [crisis] is over”.
But her words reminded me of then-Barclays boss Bob Diamond’s famous pronouncement in 2011 “that the period of remorse and apology for banks… needs to be over” — just before another tide of ordure from Libor and forex rigging engulfed the industry and Diamond himself lost his job. Perhaps Fairbairn shouldn’t have tempted fate again…