The rise of foreign owned City businesses in the UK

Five questions answered.

A new report has revealed that the UK has a large percentage of foreign owned City businesses, indicating that the UK is viewed as a viable investment by overseas firms. We answer five questions on foreign investment in the UK.

What is the current per cent of foreign-owned financial services businesses in the UK?

According to a new report published by MAS, an independent M&A adviser, which was produced in conjunction with UK Trade & Investment, the government’s export agency, 46 per cent of UK financial services companies worth more than £100m are overseas owned.

In 2011 and 2012 the most active acquirers of UK financial services firms were overseas-owned businesses. Eighty per cent of those already had existing UK operations at the time of investing, which suggests they are committed to investing in Britain for the long-term.

Which foreign country is the biggest investor?

America. Over 47 per cent of all foreign investments in the UK are from the US, companies from which see the UK as a spring board into the rest of Europe.

What do these figures say about how overseas businesses view the UK financial market place?

The report says that these figures suggest that the UK financial market is viewed as an attractive market for companies looking to expand their business operations. It is thought this is because the UK is well placed to take advantage of emerging markets such as Brazil, Russia, India and China, all of whom increased their investment in the UK by 29pc in the last year.

What do the experts says?

Olly Laughton-Scott, founding partner of IMAS, told The Telegraph: “The report reflects how extraordinarily open UK business is to overseas investment. America, with its huge financial services economy, is using the UK as its springboard into Europe. As America expands its interests, it will place more emphasis on the UK.”

He added: “As Asia becomes truly globalised, this will play to London’s strengths; they will come to Britain. China [investment] has grown the most rapidly over the last year and as financial services becomes increasingly globalised, we will see the largest proportion of that investment come to the UK.”

How is the financial services market doing in general?

According to the UK trade minister, Lord Green, who spoke to The Telegraph, the UK remains the number one destination for financial services investment in Europe.

The IMAS also offered a positive outlook by saying that retrenchment that has taken place since the credit crisis seems over and the sharp drop in the number of authorised financial services that occurred in 2008 is slowing considerably. However, some quality people are said to have left the industry due to a new rule change that requires independent advisers to register with the Financial Services Authority.

Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

Photo: Getty
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Birmingham Labour members were almost disenfranchised, until Corbyn intervened

Newer members were to be denied a say in selecting candidates.

For decades, Labour members in Birmingham have had to wait for a year after joining the party to vote to select local candidates – unlike the six-month national rule. New ward boundaries for Birmingham City Council, the largest local authority in Europe, will be contested for the first time next year during an all-out election – and a reduction from 120 to 101 members means every Labour candidate, including sitting councillors, must be selected.

However, Labour’s Birmingham Board decided that to vote in the upcoming selection meetings, members must have been in the party for a year prior to their call for candidate applications in 2016. As a result, if you wanted to have a say, the cut-off date for being a party member was July 2015: two years ago.

It took the intervention of Jeremy Corbyn turning up at an obscure local meeting in order to vote for this two-year cut-off date to be replaced by a six-month minimum period. This has enfranchised the vast majority of Labour members, many of whom were increasingly annoyed with the original decisions taken by the Birmingham Board.

One of those who would have been disenfranchised if the board had had its way is Birmingham councillor Liz Clements, who re-joined the party as soon as Corbyn was first elected leader in 2015. Twenty years ago, she was an Oxfordshire County Councillor, and, in 1999, a European parliamentary candidate. While studying at at Oxford, in the same year as Yvette Cooper, she chaired the university Labour Club for a term in 1989. This year she was selected to contest the marginal Hall Green ward in a by-election, and, had the original rules been in place, she would have been unable to vote for herself (or anyone else) to be selected for council elections next year.

She says: “For me it was simply a matter of fairness and democracy. I couldn’t understand why the national rule wasn’t being applied. I found it very odd that I could seek selection as a councillor and get elected before I’d be eligible to vote in a selection meeting myself.”

She feels the two-year cut-off would have sent a message to new joiners and re-joiners alike that they were “second-class members”.

"During the general election we succeeded in firing up our membership with enthusiasm for the Labour manifesto and for our Labour candidates – people came out to campaign in large numbers. The proposed freeze date was divisive and would have discouraged newer members from campaigning in next year’s council elections.”

Before the Birmingham Board met, a large number of branch and constituency-level Labour groups passed motions calling for the freeze date to be scrapped. Councillor Clements was not at the Board’s meeting, so can’t comment on why they chose to ignore the members. From speaking with other party members, it's clear there was a widespread belief that this was done deliberately so unpopular councillors could cling to power.

With every ward holding selection meetings, there is am opportunity to clear out the dead weight and for fresh talent to revitalise the council, which is currently struggling to keep up with the austerity cuts imposed by central government. Some sitting councillors are retiring or facing scrutiny of their records, and may not even be shortlisted for selection. The Birmingham Board, after all, can veto any candidate before selection, including current councillors with poor attendance and casework records.

It therefore isn’t surprising that Councillor Clements doesn’t believe these rule changes will actually result in different candidates being selected. For her, it was about Labour values. “Corbyn listened to members and asserted the importance of democracy, fairness and inclusion”.

One reason it is arguable the selected candidates would remain the same is that Birmingham is struggling to attract enough people to stand for selection in the first place. There is, particularly, a shortage of women putting themselves forward. Liam Byrne MP is understood to have suggested relaxing the Labour Party rule demanding that at least one woman in selected in multi-member seats. It would be an extremely unpopular decision with many members, but there aren’t currently enough women candidates for the 32 two-member wards.

Councillor Clements says we should stick to the party’s rules as they are, but we need more women and BAME candidates. There are other options being suggested; re-opening nominations if no women have declared an interest in time, allow some wards to select two men if a neighbouring single-member ward selects a woman, relax the rule entirely, demand local parties re-advertise the space and find women candidates, or something else entirely.

Selections are underway, but most will take place in September, as many wards now need to find larger venues to hold the meetings. This will give candidates eight months to campaign before the Birmingham City Council elections next May.

Its current (and likely future) leader, John Clancy will almost certainly remain in post. Results from the general election showed many areas, previously thought to be unwinnable or marginal for Labour, have become either safe or eminently winnable. If Labour can keep itself above 40 per cent in the polls, we may well see a huge influx of new councillors representing people across Birmingham. The difference now Corbyn has stepped in, is that there is a real chance most candidates and councillors will be united by a belief in Corbyn, and his manifesto.

David Barker is a writer and journalist based in Birmingham, and press officer for Bournville Labour Party