Surge in number of foreign companies in the UK

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The Independent Online

The debate over Britain's membership of the European single currency intensified yesterday after a report showed a surge in the number of foreign-owned companies in the UK despite the strength of the pound.

The debate over Britain's membership of the European single currency intensified yesterday after a report showed a surge in the number of foreign-owned companies in the UK despite the strength of the pound.

There was a 25 per cent rise in the number of subsidiaries of overseas firms over the last two years, according to information group Dun & Bradstreet. It said there were 28,777 this year compared with 23,300 in 1998.

French subsidiaries leapt by a third to 2,884 and those owned by Dutch companies jumped by a quarter to 2,895.

The only major overseas investor to see a fall was Japan, with the number of UK offshoots falling to 1,149 from 1,528. Over recent weeks there have been warnings about the pound's strength against the euro from Matsushita, Toyota and Nissan.

The anti-euro lobby seized on the figures, saying they backed up recent data showing inward investment in Britain was running at record levels.

"This further good news for the British economy once again undermines the scare stories put about by the pro-euro lobby." said a spokesman for Business for Sterling.

"Short-term currency fluctuations are simply less important than Britain's long-term competitive advantages of low taxation and light regulation." he said.

But Britain in Europe, the main pro-euro lobby group, said the survey disguised the true picture about investment intentions by foreign firms.

"Many investors have warned recently that sterling's volatility outside the euro makes it harder for them to invest in Britain," he said. "The anti-Europeans' complacency about the future of British manufacturing is breathtaking."

Philip Mellor, senior analyst at Dun & Bradstreet, said the strength of the pound was only "one element" in companies' decisions about locating here. "The UK is an attractive place to do business. French and Dutch companies, in particular, like the lighter regulation and slacker labour laws," he said.

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