UK foreign investment a vote of confidence

Top brass: King Charles and Sunak (middle) speak with Uchida during a reception at Buckingham Palace. The event marked the conclusion of the Global Investment Summit which drew global bigwigs from the world of finance. — Reuters

LONDON: Prime Minister Rishi Sunak announced £29.5bil (US$36.8bil) of private sector investment in the United Kingdom at a gathering of global executives on Monday aimed at catapulting the country back to Europe’s top spot as a destination for foreign money.

After the government last week offered permanent tax breaks for businesses to modernise plants and machinery, Sunak is hoping foreign investors will help speed up the United Kingdom’s moribund economy.

Australian funds IFM Investors and Aware Super will pump £10bil and £5bil, respectively, into projects ranging from infrastructure and energy transition to affordable housing, Sunak’s office said in a statement.

Spanish power giant Iberdrola would add £7bil to its investment plans in the United Kingdom, which include transmission and distribution electricity networks, the statement said.

Iberdrola said it would now be investing nearly €14bil in the United Kingdom by 2028.

Microsoft will invest £2.5bil in artificial intelligence infrastructure.

“Your decision to choose to invest in the United Kingdom is a huge vote of confidence in our country’s future,” Sunak told the investment summit at London’s 16th-century Hampton Court palace.

The United Kingdom, like many other countries, is seeking private sector investment to help overhaul its economy for the net-zero era and to build the kind of infrastructure that its stretched public finances cannot fund on their own.

Investment Minister Dominic Johnson said that the United Kingdom would welcome investments from China to help meet those goals.

But several major investors have said the political and regulatory uncertainty triggered by the 2016 Brexit referendum vote and subsequent political turmoil have diminished the United Kingdom’s appeal while other countries have made themselves more attractive for foreign direct investment (FDI) flows.

France has overtaken the United Kingdom as the European country with the highest number of new FDI projects.

President Emmanuel Macron announced €13bil of investment commitments in France at a similar FDI gathering in May.

The United Kingdom has emphasised the value of investments, rather than the number of projects.

Sunak said new funding for industries such as clean energy, life sciences and advanced technology would create high-quality jobs across the country.

The United Kingdom’s government acknowledges it needs to do more to compete as laid out by a review launched after the country missed out on some high-profile investments.

Financiers Stephen Schwarzman from Blackstone, Jamie Dimon from JPMorgan Chase, David Solomon from Goldman Sachs and Aviva’s Amanda Blanc were among those attending the event.

King Charles later hosted a reception at Buckingham Palace on Monday evening, where he met attendees including Mansoor bin Ebrahim Al-Mahmoud and Hamed bin Zayed Al Nahyan, the leaders of the sovereign wealth funds of Qatar and Abu Dhabi, respectively, and Nissan’s chief executive Makoto Uchida.

The United Kingdom now lags France and Germany in perceived attractiveness for FDI, according to accountancy firm Ernst and Young.

Business Minister Kemi Badenoch called for ideas from attendees on what should be done differently “rather than sticking to the status quo”. — Reuters

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