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

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Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.