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Govt’s Brexit investment claims called into question

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Claims that the new international trade department has bought in £16bn of foreign direct investment since Britain voted to leave the EU have come under question as they appear to have included years-old projects.

Liam Fox’s department promoted the figure in late December as evidence that Britain “remains truly open for business”.

However, an analysis by the Financial Times of the case studies offered by the Government shows that many of the projects pre-date the Brexit vote.

Of those that were agreed after the vote, many had still been announced previously, for example a commitment from a Danish company to set up a £60m recycling and energy plant in Cheshire, which had been announced by the company in 2015 and was granted planning permission in February last year.

A scheme involving Wheelabrator Technologies and SSE to regenerate a West Yorkshire power station, first revealed in 2012, also made the international trade department’s list, as did a decision by US firm Calysta to open a new agritech facility in the north east that was made five months before the referendum.

An international trade department spokesman told the FT that it could not disclose how the £16bn figure was calculated but was justified in using cases from prior to the Brexit vote.

“They are just examples of why FDI is useful, they are not part of the £16bn,” said a spokesman. “I can’t provide you with those figures.”

Single market struggles

Also today, a group of City firms are calling for continued access to the European single market after Brexit, in contrast to many government ministers who are willing to accept the loss of single market access to restrictions on the free movement of labour in to Britain.

The International Regulatory Strategy Group industry body says leaving the European Union’s passporting system would hit London’s position as a financial hub, according to Sky News.

An IRSG report says any trade barriers between the UK and EU would “hinder markets in their role of channelling savings into investment and of creating jobs and growth”.

The IRSG is chaired by former Treasury minister Mark Hoban.

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. I see nothing wrong with using the “total figures of foreign investment of £16 billion”. The UK can be proud in the face of so many Economic hurdles this has been achieved. The agreed deals would have had exit clauses built in and perhaps BREXIT could have been one of these clauses. Therefore to keep the deals and get them moving is still good business!. Today Boris announced we are top of the list to deal on a single market basis with USA, I am certain China/Russia/India will follow as these countries have Massive Investment in UK at Present. So that leaves Europe and most of these countries Need UK trade

  2. @BIll Hopkins

    But we need Europe more, as over 50% of all our exports go to Europe. P{ray tell what we have that China may want? As for India when we were punting our jet fighters, they decided to buy French instead. Russia? Shake hands and count your fingers. The US? maybe. Atprrsent we export around 12% of our total.

    Interestingly the figures don’t differentiate between exports from wholly UK firms and those owned by foreigners. So for example, Nissan, Honda, Mini and Rolls Royce exports don’t put profits into the UK. WE are the labour force, not the owners. The profits are repatriated. What they contribute is tax and employment and FX earnings.

    Yes we will still have inward investment (Snapchat announced today) but we have yet to see how many will re-locate. Self congratulation is not in order until the Fat Lady sings.

  3. Unlike Bill Hopkins I don’t see how it is justifiable to use the pre-Brexit deal figures and, it seems pretty obvious, that neither do a lot of other people, otherwise it wouldn’t even make the newspapers. It is, basically, slight of political hand to do so, although nothing you wouldn’t have expected from the likes of Liam Fox, or Boris, as Bill calls the cuddly foreign secretary.

    What constantly amazes me is how often the pro-brexit politicians expound upon how wonderful a position the country is in and how well Britain has done, over the last few years, to put itself into shape as one of the best economies in the world. The obvious point (that nobody seems to make to them) is that this was all done whilst being in the EU! Go figure.

  4. The point from Bill Hopkins is clear – these companies COULD have backed out of these investments because of Brexit and haven’t so should be classed as part of the £16bn to be fair.

    When you have Brussels sponsoring our factories to move away from the UK like the Ford factory from Southampton to Turkey then you start to realise that they do NOT have our best interests at heart.

    And as to the UK being one of the best economies in the world – we have gone from top 5 to top position SINCE the Brexit vote so our future cant be that bad or our economy would be worse and not better.

    With regards to our exports to the EU – its less than you think – around 44% to the EU and 56% elsewhere in the world and we STILL import from the EU more than we export to them. And to be honest it is still only 12% of our total economy so we are 100% involved on something that should only effect 12% of business…

  5. @Lorna Howe
    Lorna, the BBC website, 28 October 2016, says the following “Reality Check verdict: The World Bank produces the rankings which are based on average exchange rates over the period. The UK has not fallen behind France so far.” This was in response to claims that the UK had fallen to sixth place in the rankings, so seems to be stating it is still fifth. Do you have good evidence that Britain has jumped to first place? If not the your argument loses a bit of credibility. I stand to be corrected, however.

  6. “Britain ended last year as the strongest of the world’s advanced economies with growth accelerating in the six months after the Brexit vote, it was revealed overnight,” Philip Aldrick reports for The Australian. “Business activity hit a 17-month high last month, meaning that the economy grew by 2.2 per cent last year — more than the six other leading nations, including the US, Germany and Japan.”

    “Far from slowing after the referendum in June, as predicted by the Treasury and Bank of England, growth appeared to have improved,” Aldrick reports. “GDP grew at 0.3 per cent and 0.6 per cent in the first two quarters of last year, compared with 0.6 per cent and an estimated 0.5 per cent in the final period.”
    I don’t believe anything I hear from the BBC and stopped listening to their news years ago – they are paid money from the EU to promote EU propaganda.

  7. UK trade prospects after Brexit by PwC Group Nov 2016

    World trade growth has slowed relative to global GDP growth since the financial crisis. This slowdown has been exacerbated recently by weaker growth in emerging markets and the commodity trade cycle.

    UK export performance since 2007 appears to have been stronger outside the EU than within the Single Market. The UK also has a strong comparative advantage in services trade, which is growing more strongly globally than trade in goods.

    Medium-term growth prospects remain strong in key emerging market regions, including Asia, Africa and the Middle East. That suggests that the recent downturn in trade growth outside the developed economies should prove temporary, and that UK export growth to markets outside the EU should soon resume momentum, perhaps rising to around 65-70% of total UK exports by 2030.

    The key policy priorities for improving UK trade prospects after Brexit should be: securing the best possible access to the Single Market; a programme of trade promotion in non-EU markets; supply-side reform; and active engagement with other major international institutions – including the World Trade Organisation.

  8. Lorna, you were c l early reffering to the biggest economies in the world, of which britain is fifth. Where, in the research you have managed to dig up, does it say britain is now the biggest? You have quoted some reporter from The Australian, and provided your own conspiracy theory about the BBC being paid by the EU to promote their so called propaganda. Don’t bother about what pwc says about 2030. There are many more opinions that would say the opposite. If the UK were the world’s biggest economy don’t you think N farage or Boris joh son would have mentioned it? I still stand to be corrected if you can find a reputable source. Preferably one more reliable than the world bank, if you don’t believe the BBC.

  9. Whilst working for the Remain campaign I had many arguments with them about statistics. Spurious ones that they quoted and accurate ones that they stubbornly omitted. For example on immigration, more than 50% come from outside the EU and they steadfastly refused to use this figure.

    However the leave campaign figures were/are even more outrageous. (£350 million a day/week??) So to Lorna’s figures. We actually export currently 47.9% of the total to the EU and when you add the 12.5% that we export to the US you can see that we only export about 39.6% to the rest of the world. So if we apportion that equally only between India, Australia, Canada and the whole of the Far East that only amounts to around 10% each. Not exactly wonderful.
    When you consider that Australia, New Zealand and Canada have a combined population of 63.7 million (about the same as the UK on its own) compared to a market of over 300 million in the EU, it rather makes you wonder what the Brexit politicians are crowing about.

    I also suppose you are going to tell me that the bankers who sat in front of the Select Ctte are also blowing out of their ear. They are only interested in the profitability of their firms and we will look pretty silly if even half the suggest numbers are culled.

    At root it is far too early to tell and the prevarication of the Government rather leads one to suspect that they are wetting themselves and don’t really have much of a clue. I would be willing to bet that Theresa, in a dreaming moment would have wished for the Referendum result to have been the other way around. Oh, and while I’m at it; it wasn’t a clear and overwhelming mandate. It was through by the narrowest of margins and in any other country that holds plebiscites it would have failed because they have a minimum hurdle rate.

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