Why are foreign investments in the UK rising?

Is it just the weather?

There is some good news for the UK taxman this summer. First, the country actually had a summer. It even fell on a Sunday, as a colleague pointed out. Second, according to the Office for National Statistics, this year Brits are happier. The Jubilee played its part, a report suggests.

And this is not all: while Jubileeing first and waiting for RB immediately afterwards, foreign investments have also increased, according to the Inward Investment Report 2012/2013 presented by government agency UK Trade & Investment (UKTI).

The UKTI says that while global Foreign Direct Investment inflows declined by 18 per cent, inflows into the UK experienced a 22 per cent year on year increase.

"The UK has received a major vote of confidence from foreign investors confirming that the UK remains a world leading business destination,” says Trade and Investment Minister Lord Green, adding that "attracting foreign investment is an important element of the UK Government’s economic and growth programme."

Between Olympic and Royal fever the UK reached the peak of its marketing capabilities in the past two years. But what supported this powerful business card?

The World Bank ranks the UK among the top countries for ease of doing business. It considers elements such as the 13 days on average to set up a business or the 24 hours necessary to register a company.

The UKTI claims that the removal and reduction of "red tape’" has already saved UK-based businesses approximately £1bn in the last two years. It also highlights the advantages of a flexible labour market and of a "highly competitive tax environment", with the main rate of corporation tax being reduced to 21 per cent in 2014 and 20 per cent in 2015 – the lowest rate in the G7 and the joint lowest in the G20.

A sunny picture to indulge in during the summer.

The strengths of this chapter of the UK economy are reflected in the identikit of its main investors: North America and Japan, but also India and China, across very different sectors. Altogether Britain has attracted 1,559 projects, 11 per cent more than the previous year and the UKTI estimates these investments have generated 170,000 jobs.

Foreigners are particularly keen in investing in software and computer services, which, with 17 per cent of projects, represent the largest slice of the cake. Financial and business services are the second most attractive, but the broad range of investments includes creative and media services, biotechnology and pharmaceuticals and renewable energy.

Emerging economies are investing from scratch and buying British companies, but it’s the comparison with other EU member states that can work as a litmus test of the real strengths of the Brits.

Investments from French and German companies have increased by 43 and 18 per cent respectively.

Despite a 5 per cent reduction, Italy is, together with France, the third foreign investor.

Italians are attracted by the political and economic stability. No wonder, as the waiting for the Royal Baby has been equalled only by the waiting in the past days for the outcome of the final sentence on former PM Berlusconi.

A legislation that encourages innovation is also considered a reason to invest in the UK, together with an open market that makes it easy to access talent.

"Italian companies increasingly see the UK as the ideal destination to grow, succeed and access international opportunities. The exceptional Italian results reflect the capacity for recovery of the country and of its profound entrepreneurial roots, as well as its industrial excellence," says British consul for Milan Vic Annels.

This sounds a bit as if we’ve got it all, apart from a couple of fundamental things, but as our governments are busy at the moment, we’ll come at yours.

Interestingly, the reasons given to support this choice highlight some historical weaknesses of other European countries (it is probably worth mentioning that the UK is in Europe as well) and some historical strengths of the British system more than a renewed economic epiphany.

So, after all this sun, let’s not forget the role of rain in growing awareness: the UK has been dynamic and successful in attracting foreign investors. But this is only a chapter of the economy and the Royal baby is going to cry a lot before becoming a king.

Photograph: Getty Images

Sara Perria is the Assistant Editor for Banking and Payments, VRL Financial News

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Hannan Fodder: This week, Daniel Hannan gets his excuses in early

I didn't do it. 

Since Daniel Hannan, a formerly obscure MEP, has emerged as the anointed intellectual of the Brexit elite, The Staggers is charting his ascendancy...

When I started this column, there were some nay-sayers talking Britain down by doubting that I was seriously going to write about Daniel Hannan every week. Surely no one could be that obsessed with the activities of one obscure MEP? And surely no politician could say enough ludicrous things to be worthy of such an obsession?

They were wrong, on both counts. Daniel and I are as one on this: Leave and Remain, working hand in glove to deliver on our shared national mission. There’s a lesson there for my fellow Remoaners, I’m sure.

Anyway. It’s week three, and just as I was worrying what I might write this week, Dan has ridden to the rescue by writing not one but two columns making the same argument – using, indeed, many of the exact same phrases (“not a club, but a protection racket”). Like all the most effective political campaigns, Dan has a message of the week.

First up, on Monday, there was this headline, in the conservative American journal, the Washington Examiner:

“Why Brexit should work out for everyone”

And yesterday, there was his column on Conservative Home:

“We will get a good deal – because rational self-interest will overcome the Eurocrats’ fury”

The message of the two columns is straightforward: cooler heads will prevail. Britain wants an amicable separation. The EU needs Britain’s military strength and budget contributions, and both sides want to keep the single market intact.

The Con Home piece makes the further argument that it’s only the Eurocrats who want to be hardline about this. National governments – who have to answer to actual electorates – will be more willing to negotiate.

And so, for all the bluster now, Theresa May and Donald Tusk will be skipping through a meadow, arm in arm, before the year is out.

Before we go any further, I have a confession: I found myself nodding along with some of this. Yes, of course it’s in nobody’s interests to create unnecessary enmity between Britain and the continent. Of course no one will want to crash the economy. Of course.

I’ve been told by friends on the centre-right that Hannan has a compelling, faintly hypnotic quality when he speaks and, in retrospect, this brief moment of finding myself half-agreeing with him scares the living shit out of me. So from this point on, I’d like everyone to keep an eye on me in case I start going weird, and to give me a sharp whack round the back of the head if you ever catch me starting a tweet with the word, “Friends-”.

Anyway. Shortly after reading things, reality began to dawn for me in a way it apparently hasn’t for Daniel Hannan, and I began cataloguing the ways in which his argument is stupid.

Problem number one: Remarkably for a man who’s been in the European Parliament for nearly two decades, he’s misunderstood the EU. He notes that “deeper integration can be more like a religious dogma than a political creed”, but entirely misses the reason for this. For many Europeans, especially those from countries which didn’t have as much fun in the Second World War as Britain did, the EU, for all its myriad flaws, is something to which they feel an emotional attachment: not their country, but not something entirely separate from it either.

Consequently, it’s neither a club, nor a “protection racket”: it’s more akin to a family. A rational and sensible Brexit will be difficult for the exact same reasons that so few divorcing couples rationally agree not to bother wasting money on lawyers: because the very act of leaving feels like a betrayal.

Or, to put it more concisely, courtesy of Buzzfeed’s Marie Le Conte:

Problem number two: even if everyone was to negotiate purely in terms of rational interest, our interests are not the same. The over-riding goal of German policy for decades has been to hold the EU together, even if that creates other problems. (Exhibit A: Greece.) So there’s at least a chance that the German leadership will genuinely see deterring more departures as more important than mutual prosperity or a good relationship with Britain.

And France, whose presidential candidates are lining up to give Britain a kicking, is mysteriously not mentioned anywhere in either of Daniel’s columns, presumably because doing so would undermine his argument.

So – the list of priorities Hannan describes may look rational from a British perspective. Unfortunately, though, the people on the other side of the negotiating table won’t have a British perspective.

Problem number three is this line from the Con Home piece:

“Might it truly be more interested in deterring states from leaving than in promoting the welfare of its peoples? If so, there surely can be no further doubt that we were right to opt out.”

If there any rhetorical technique more skin-crawlingly horrible, than, “Your response to my behaviour justifies my behaviour”?

I could go on, about how there’s no reason to think that Daniel’s relatively gentle vision of Brexit is shared by Nigel Farage, UKIP, or a significant number of those who voted Leave. Or about the polls which show that, far from the EU’s response to the referendum pushing more European nations towards the door, support for the union has actually spiked since the referendum – that Britain has become not a beacon of hope but a cautionary tale.

But I’m running out of words, and there’ll be other chances to explore such things. So instead I’m going to end on this:

Hannan’s argument – that only an irrational Europe would not deliver a good Brexit – is remarkably, parodically self-serving. It allows him to believe that, if Brexit goes horribly wrong, well, it must all be the fault of those inflexible Eurocrats, mustn’t it? It can’t possibly be because Brexit was a bad idea in the first place, or because liberal Leavers used nasty, populist ones to achieve their goals.

Read today, there are elements of Hannan’s columns that are compelling, even persuasive. From the perspective of 2020, I fear, they might simply read like one long explanation of why nothing that has happened since will have been his fault.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.