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Business News

Britain: Europe's top attraction for investors

A competitive tax system and flexible labour markets said to be bringing in overseas money

The UK remains the most attractive destination in Europe for foreign business investment, winning almost 1,800 new projects in the past year – the highest since records began in the 1980s, according to official figures released today.

Lord Ian Livingston, the Trade minister, said it had been an "exceptional year for foreign investment", which had created 66,390 new jobs, the highest number since 2001.

"It shows that our strategy to attract investors to the UK by creating one of the most business-friendly environments in the world is the right one, and it is proof that foreign investors have confidence in the UK as the best place to do business," Lord Livingston said.

The UK Trade and Investment (UKTI) figures show that the UK attracted 14 per cent more inward investment projects in 2013/14 than in the previous year. Northern Ireland received the highest individual investment, a 32 per cent increase. The United States led the rush to invest in Britain with 501 projects in the UK, followed by Japan and France. The figures also depict the growing importance of India and China which invested in 74 and 88 projects respectively.

"Investment in Britain is flying high," said John Cridland, the director-general of the CBI. "The UK is a very strong brand overseas, and this is an engine for providing the growth and jobs we need to drive forward a healthy and sustainable recovery."

Advanced manufacturing industry benefited the most from foreign investment, gaining more than 400 new projects and creating 37,204 jobs in the UK.

Lee Hopley, the chief economist at the manufacturers' organisation EEF, said: "Manufacturing has played a starring role in driving up inward investment and this serves to reinforce the vital need to continue building supply-chain capacity, and encourage investment in technologies."

Ms Hopley said that the UK's competitive tax system and flexible labour markets were reasons for the UK continuing "to punch above its weight in attracting overseas investment".

"Reforms to improve the competitiveness of the tax system coupled with our ability to capitalise on strengths, such as the science base and flexible labour markets, [had] propelled the UK up the rankings for investors around the world."

Yet Ms Hopley warned that the UK must not become complacent: "We must keep raising our game to lock in long-term growth by investing more in skills and innovation, and driving business costs down."

The Prime Minister David Cameron promised that the Government would "continue to work on behalf of every hardworking business in the UK to drum up trade, encourage investment, and pave the way for growth so we can generate jobs, pay our way in the world, and create stability, security and a brighter future for our country."

Businesses and political leaders from around the world will be presented with more investment opportunities at the Commonwealth Games Business Conference in Glasgow this week.