While the Government says inward investment is important for its “levelling up” agenda, a report out today from MP’s says that current patterns of Inward Foreign Direct Investment (FDI) perpetuate the economic dominance of London and the South East.

While the report welcomes recent measures for investment promotion, such as the creation of the Office for Investment (OfI),it cautions that these initiatives must be integral parts of a coherent overall investment strategy, not just a collection of ad hoc measures.

Commenting on the report, Angus Brendan MacNeil MP, Chair of the International Trade Committee, said:

“Inward foreign direct investment can benefit local economies, generating new jobs and bringing new skills.

However, far from helping to ‘level up’ across the UK, current patterns of foreign direct investment overwhelmingly benefit London and the South East.

If the Government is serious about its levelling-up agenda, it needs to show it has a plan to maximise the benefits of inward investment in all parts of the UK.

We thank all those who have engaged with our inquiry and look forward to receiving the Government’s response.”

The Government has made much of “levelling up” across the UK – and indicated that inward investment has an important role in achieving it. However, it is uncertain how this translates into concrete interventions.

The Government should set out in its forthcoming levelling-up White Paper how it expects investment promotion to support and align with wider levelling-up goals. This should include reference to policy on infrastructure, skills, higher education, integrating with Global Value Chains and further devolution of powers in the English regions.

The Skills Accelerator is a welcome innovation in enhancing local skills bases. To maximise the benefits of this, skills policy needs to be coherently joined up with investment promotion at sub-national level. Similarly, higher education can play a crucial role in attracting inward investment and the Government should seek the sector’s full engagement in sub-national investment promotion.

The Prime Minister has indicated the possibility of more devolution in the English regions, but the form this will take is unclear. The Committee recommends the Government consider how to create a coherent sub-national geography that works for investment promotion, effectively tying together areas with common identities and features. This should include reviewing the role of Local Enterprise Partnerships and considering how they can most effectively be funded in relation to investment promotion.


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