David Cameron makes global investment appeal


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Indy Politics

David Cameron made an appeal for more international investment in Britain today as the coalition struggles to haul the economy out of the worst double-dip recession in half a century.

After figures revealed a worse-than-expected third consecutive quarter of decline, the Prime Minister told the first of a series of trade summits being held during the Olympics: "Britain is back open for business."

But he rejected calls for a change in policy to stimulate the economy, saying the Government would "finish the job" of tackling the deficit.

Sound finances have to be teamed with measures to boost competitiveness in order to restore UK plc's fortunes, he said.

He also faced tough questions from business leaders over the coalition's approach to immigration and expanding aviation capacity.

The 0.7% contraction in GDP between April and June was much more severe than the 0.2% fall that forecasters expected.

Britain is now mired in the longest double-dip recession since quarterly records began in 1955, and possibly since the Second World War.

In a speech to a global investment conference at Lancaster House today, Mr Cameron said: "My message today is very simple: Britain is back open for business, and we are committed to supporting global growth with open trade between our nations.

"So invest in Britain, partner with Britain, not just to invest in this country, but because this is the place, the hub, from which your company can grow and expand.

"So make this Olympic year a great year for your business, here in Great Britain."

Official figures released today show that the number of inward investment projects in the UK has fallen for the third year in succession.

Ministers said the numbers were "very positive" because they showed foreign direct investment created or secured more than 112,000 jobs in the UK in 2011/12 - 19% up on the previous year.

Today's business summit is the first of 18 being held during the Olympic period to capitalise on the presence in London of thousands of world leaders, policymakers and investors.

The Government hopes more than £1 billion worth of deals and projects can be generated over the summer on the back of the Games, with a further £13 billion worth over the two or three years to come.

The Prime Minister said: "At a time when it is global business partnerships, new investments and start-up ventures that will help get the world back to growth, nothing symbolises the opportunity of partnership and collaboration more than the Olympics.

"So yes, I want medals for Britain, and there will be no more passionate supporter of Team GB than me. But I've got a job to do this summer, and a big part of that job is to get behind British business, and do everything I can to help secure the trade and investment that will help get the world back to sustained, global growth."

Batting away demands for the Government's purse strings to be loosened to support growth, Mr Cameron said: "The first thing you need as investors is confidence in the long term stability of the economy you are investing in.

"You need to know that the public finances are under control and that your businesses aren't suddenly going to be crippled by soaring interest rates.

"The coalition Government in Britain inherited the worst deficit since the Second World War.

"But we have acted decisively to put in place a credible and steady plan to restore confidence in our public finances.

"This has meant taking some tough decisions - increasing the state pension age, reforming public sector pensions to halve their cost, taking forward sweeping long-term reforms to welfare.

"We've taken bold decisions to sort out our public finances and earn credibility with the markets.

"As a result, in just two years we have already cut the deficit by over a quarter. Our interest rates are less than 2%.

"And my message today is clear and unequivocal. Be in no doubt: we will go on and finish the job.

"We will deal with the deficit. We will keep UK interest rates low. And we will continue to take the tough decisions that are necessary for business leaders and investors to have confidence in the long term future of the British economy.

"Getting our debt under control is absolutely essential for growth. But fiscal discipline and growth are not alternatives.

"You need one to get the other. Sound finances alone are not sufficient.

"If Britain is going to be a success, we need a competitive economy.

"So we're absolutely focused on doing everything possible to support enterprise and make Britain the best place in the world in which to start or grow a business."

In a boost for south London, it was announced today that the £8 billion redevelopment of Battersea Power Station is planned to begin next summer, generating 33,000 jobs.

The iconic landmark, derelict since ceasing electricity production in 1983, was bought earlier this month by Malaysian developers SP Setia and Sime Darby, which want to build homes, office space, a hotel and shops on the site, while preserving its famous towers. The project is expected to create 20,000 construction jobs and permanent work for 13,000 people.

The total of 1,406 foreign direct investment projects detailed in UKTI's Inward Investment Report for 2011/12 was down on 1,434 in 2010/11 and the record 1,744 in 2008/09.

But the report showed that overseas investors created 52,741 jobs in the UK in 2011/12, up 26% on the previous year, and safeguarded 59,918 (up 14%).

The UK remains the number one European destination for foreign direct investment, with stock standing at £772 billion and investment flows in 2011 of £35 billion, up 7% on the previous year, according to previously-released United Nations figures.

The UK attracted investment from 58 countries, with the USA topping the list, followed by Italy, China - up from seventh place the year before - Japan, India, Germany and France, in that order.

Business Secretary Vince Cable said: "These figures are a clear demonstration that international investors have confidence in the UK.

"Despite a difficult international economic climate, more jobs have been created and secured than in any year for over a decade.

"Openness to investment is crucial for sustainable economic growth, and the Government has worked hard to ensure the UK remains attractive to companies around the globe.

"A reduced and simplified tax burden and a clear-headed approach to rebalancing the economy have helped maintain our position as the top destination in Europe in which to do business.

"The bottom line is that firms of all sizes believe that if they come to the UK they will grow and succeed."

Mr Cable is one of a number of politicians attending today's Lancaster House conference, including Chancellor George Osborne, Deputy Prime Minister Nick Clegg, and London Mayor Boris Johnson.

Among speakers at the event are International Monetary Fund director general Christine Lagarde, OECD secretary-general Angel Gurria, Bank of England Governor Sir Mervyn King, Google executive chairman Eric Schmidt, GlaxoSmithKline chief executive Sir Andrew Witty and ARM chief executive Warren East.