Britain loses its charm for foreign money

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The Independent Online
INTEREST in Britain from potential overseas investors has fallen substantially this year with the exception of the US, according to the Invest in Britain Bureau. Approaches from firms in the Far East have plummeted by 40 per cent, while those from European companies have dropped by almost one-third, writes Mary Fagan.

Baroness Denton, the small firms minister, said: 'We are still the number one choice for Japanese and US investors in the European Community, but the competition has certainly intensified.' The fall in interest recorded by the Department of Trade and Industry echoes a report earlier this week from Ernst & Young which said that weak transport infrastructure and a poor skills base were threatening future inward investment in the UK.

The DTI estimates that 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.

The latest report from the Invest in Britain Bureau shows there were 303 inward investment projects in Britain last year, which would create or protect 56,000 jobs. In England, pounds 29.3m of pounds 94.6m awarded by the Government in regional selective assistance grants went to foreign firms.