A pounds 300m welcome: The UK is luring foreign business

THE Hualon affair, under which the Northern Ireland Industrial Development Board will this week commit itself to a pounds 61m grant for a Taiwan textile company to build a controversial factory near Belfast, has highlighted the complex process by which the Government tries to generate jobs by luring foreign companies to these shores.

Britain spends approximately pounds 300m a year on grants for so-called inward investment. This figure is inflated by the time spent by government departments and British embassies on encouraging and vetting applications.

Once they have established themselves in this country, foreign corporations may also be able to take advantage of the annual pounds 1.5bn or so of other forms of industrial aid, ranging from regional enterprise grants to loyal employment assistance.

The UK is the most attractive location in the European Union for non-European companies, taking 40 per cent of total inward investment. But the Government points to a payback: overseas companies provide 16 per cent of all UK manufacturing jobs, 22 per cent of net output and 27 per cent of net capital expenditure.

Northern Ireland's high unemployment means that it is under more pressure than other parts of the UK to attract industry. The region's grant system, which operates independently from the mainland, has been regarded sceptically since the collapse of the De Lorean car company in 1982 cost taxpayers dollars 86m ( pounds 57m) amidst a welter of financial irregularities.

Despite attempts by Department of Trade and Industry officials in London to distance the mainland's industrial grants system from those of Northern Ireland, they are very similar.

The Northern Irish Industrial Development Board is replicated in Wales, Scotland and five English regions. Proposals are vetted by officials to see if they will generate jobs and contribute to the local community. But the critical test is to ensure that they are viable. 'This is more of an art than a science,' a DTI spokesman admitted.

Each region has an industrial development advisory board of industrialists and trade unionists. Promising schemes are put to them, and those requiring grants of more than pounds 1m go to a national IDAB.

Payments are staged throughout the life of the project, and the regional units monitor their investments to ensure that investment, job and sales targets are met before the next instalment is handed over.

The DTI's Invest in Britain Bureau says that in the year to 31 March 1993, the last for which figures are available, it was aware of 303 foreign projects that generated 56,271 jobs.

Sir Ronald Halstead, the former Beecham chairman who has recently stepped down as chairman of the national IDAB, said: 'The people doing the assessing are highly motivated. They are seconded from industry and the financial community for two or three years before going back to their firms.'

He pointed to the success that the Japanese manufacturers, Nissan and Fujitsu, have had in the north-east of England.

But James Grierson, an economic development officer with Dumfries and Galloway Regional Council in Scotland, argued that the full costs incurred in attracting inward investment were 'rarely, if ever, accurately computed'.

He claimed: 'Apart from promotional expenditure and the consultancy fees that are a prerequisite in the evaluation of the more esoteric type of enterprise, the participation of a number of funding partners obscures the true cost.

'Even a relatively simple tourist development could involve the Scottish Office, Scottish Enterprise, the local enterprise company, the regional council (economic development) and the EU in providing a package of loan and grant support. In addition, ScottishPower could be called upon to supplement the power supply.'

(Photograph omitted)

Life and Style
A teenager boy wakes up.
life
Arts and Entertainment
Critics say Kipling showed loathing for India's primitive villagers in The Jungle Book
filmChristopher Walken, Bill Murray, Scarlett Johanssen Idris Elba, Andy Serkis, Benedict Cumberbatch, Cate Blanchett and Christian Bale
Life and Style
food + drink
Life and Style
Playing to win: for Tanith Carey, pictured with Lily, right, and Clio, even simple games had to have an educational purpose
lifeTanith Carey explains what made her take her foot off the gas
PROMOTED VIDEO
Life and Style
tech
Arts and Entertainment
A still from Duncan Campbell's hour-long film 'It for Others'
Turner Prize 2014
News
i100
Arts and Entertainment
Tony Hadley in a scene from ‘Soul Boys Of The Western World’
musicSpandau Ballet are back together - on stage and screen
Arts and Entertainment
From left to right: Ed Stoppard as Brian Epstein, Sheridan Smith as Cilla Black and Elliott Cowan as George Martin in 'Cilla'
tvCilla review: A poignant ending to mini-series
News
i100
Life and Style
Bearing up: Sebastian Flyte with his teddy Aloysius in Brideshead Revisited
lifePhilippa Perry explains why a third of students take a bear to uni
Arts and Entertainment
Sir Alan Sugar appearing in a shot from Apprentice which was used in a Cassette Boy mashup
artsA judge will rule if pieces are funny enough to be classed as parodies
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

SQL Developer (Stored Procedures) - Hertfordshire/Middlesex

£300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...

Day In a Page

Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?
This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

Is a sub-2-hour race now within sight?

Dennis Kimetto breaks marathon record
We shall not be moved, say Stratford's single parents fighting eviction

Inside the E15 'occupation'

We shall not be moved, say Stratford single parents
Air strikes alone will fail to stop Isis

Air strikes alone will fail to stop Isis

Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
Nadhim Zahawi: From a refugee on welfare to the heart of No 10

Nadhim Zahawi: From a refugee on welfare to the heart of No 10

The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
Witches: A history of misogyny

Witches: A history of misogyny

The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
Shona Rhimes interview: Meet the most powerful woman in US television

Meet the most powerful woman in US television

Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

Endangered communities photographed 'like Kate Moss'

Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style