2012: UK's biggest ever investment drive starts today

Could generate £1bn of UK deals.

More than 4,000 business leaders and politicians are gathering in London for an Olympics investment conference that the government says could generate £1bn of UK deals.

Lancaster House in central London is to be repositioned as the British Business Embassy during the Games, and play host to a series of events to promote British business to global leaders. There will be 17 held in total including a special business summit for China.

UK Trade and Investment, the government’s department for boosting trade overseas, has identified potentially £4bn of “high value opportunities” for UK firms to work on overseas, plus up to £6bn from direct investment in UK projects from international companies.

UKTI says inward investment by overseas firms created 52,741 new jobs in the year to the end of March, an increase of 26 per cent increase from the previous year.

In total, the government hopes the Olympics and legacy projects will add £13bn to the UK economy over the next ten years.

Economists, however, are not all in agreement that the Games will prove a boost to UK business. Richard Jackman, professor of economics as LSE told economia, "It’s possible to measure financial elements of the Games – the costs, the immediate income and spin-off revenue from restaurants or hotel spend. It becomes less straightforward when measuring the impact afterwards – the change in the character of an area, the sites that London inherits as a result. To what extent their impact is new or a result of displacement is less clear.

"There may be a gross benefit in terms of new facilities, but this was probably not the most efficient way of achieving it."

Raymond Sauer, economics professor at Clemson University, agreed. He said, "Investment in the Olympics is first and foremost an investment in sport. That’s the spirit of the Games. To see it devolve into an excuse or a vehicle for economic development would be unfortunate.

"Claims that it’ll do much for the economy are overstated." 

The government is relying on the Games to give the UK economy a much-needed boost after official figures yesterday showed that the UK GDP shrank for the third consecutive quarter, by 0.7 per cent to the end of June.

This story first appeared in economia.

Olympic Stadium. Photograph, Getty Images

This is a news story from economia.

Photo: Getty
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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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