'Vote of confidence': UK hails $37 billion of foreign investment

FILE PHOTO: Britain’s Prime Minister Rishi Sunak speaks to employees as he tours the car manufacturer, Nissan, in Sunderland, Britain, November 24, 2023. Ian Forsyth/Pool via REUTERS/File Photo

By Alistair Smout

LONDON (Reuters) -Prime Minister Rishi Sunak announced 29.5 billion pounds ($36.8 billion) of private sector investment in Britain at a gathering of global executives on Monday aimed at catapulting the country back to Europe’s top spot as a destination for foreign money.

FILE PHOTO: Britain’s Prime Minister Rishi Sunak speaks to employees speaks to the media after he tours the car manufacturer, Nissan, in Sunderland, Britain, November 24, 2023. Ian Forsyth/Pool via REUTERS/File Photo

After the government last week offered permanent tax breaks for businesses to modernise their plants and machinery, Sunak is hoping his wooing of foreign investors will help to speed up Britain’s moribund economy.

Australian funds IFM Investors and Aware Super will pump 10 billion pounds and 5 billion pounds, respectively, into projects ranging from infrastructure and energy transition to affordable housing, Sunak’s Downing Street office said in a statement.

It added that Spanish power giant Iberdrola would add 7 billion pounds to its investment plans in Britain, which include transmission and distribution electricity networks.

Iberdrola said it would now be investing nearly 14 billion euros in Britain by 2028.

Microsoft will also make a 2.5 billion-pound investment in artificial intelligence infrastructure.

“Your decision to choose to invest in Britain is a huge vote of confidence in our country’s future,” Sunak said in his speech to address the investment summit at London’s 16th-century Hampton Court palace.

Britain, like many other countries, is seeking private sector investment to help overhaul its economy for the net-zero era and to build the kind of infrastructure that its stretched public finances cannot fund on their own.

But several major investors have said the political and regulatory uncertainty triggered by the 2016 Brexit referendum vote, and the subsequent political turmoil, has diminished Britain’s appeal while other countries have made themselves more attractive for foreign direct investment (FDI) flows.

France has overtaken Britain as the European country with the highest number of new FDI projects. President Emmanuel Macron announced 13 billion euros ($14 billion) of investment commitments in France at a similar FDI gathering in May.

Britain has emphasised the value of investments, rather than the number of projects. Sunak said new funding for industries such as clean energy, life sciences and advanced technology would create high-quality jobs across Britain.

Britain’s government acknowledges it needs to do more to compete as laid out by a review launched after the country missed out on some high-profile investments.

Top financiers Stephen Schwarzman from Blackstone, David Solomon from Goldman Sachs, Jamie Dimon from JP Morgan Chase and Aviva’s Amanda Blanc were due to attend Monday’s event.

LAGGING UK

Britain now lags France and Germany in perceived attractiveness for FDI, according to accountancy firm EY.

“Despite a lot of nay-saying, people actually want to invest in the UK,” business minister Kemi Badenoch told LBC radio.

“They’re quite confident that this is a place where they can put their money and they will make good investments while helping us to grow our economy and deliver those jobs and wages that the people of the UK demand.”

Nissan said on Friday it would build electric cars at its plant in northeast England.

Britain plans to set up a concierge service to help potential investors deal with the government, because business does not want to deal with multiple departments.

“It wants to deal with one person,” investment minister Dominic Johnson told Reuters, adding ministers could then have “very strong, frank discussions with the international investment community about how we can make the environment more investable”.

The 10 billion-pound investment plans for the UK of IFM represented an increase from an original announcement, made last year, of 3 billion pounds, while all the other projects announced by the government were new, a government official said.

King Charles was due to host a reception for attendees of Monday’s gathering at Buckingham Palace on Monday evening.

($1 = 0.9168 euros)

(Writing by William Schomberg and Alistair Smout, Editing by Louise Heavens and Mark Potter)