Fox resorts to cynical spin as foreign investment in UK tumbles

The International Trade Secretary trumpeted the UK topping the European league table, ignoring a 13 per cent fall in projects and a marked narowing of its lead

London has attracted interest from US investors in digital but the picture elsewhere is less than rosy (Shutterstock / dade72)

The May government has been arguably the worst in British political history but one area where it has proven truly world class is in the cynical and selective use of figures that an unkind person might refer to as weasely mendacity.

Take the latest report into the UK’s attractiveness as a location for foreign direct investment, a regular missive from EY, the consulting firm.

The 2019 edition prompted Brexiteer Liam Fox, the Secretary of State for International Trade, to hail his country’s position as “the top destination for foreign direct investment in Europe, despite the challenging global economic environment”.

“The EY survey shows how our vibrant digital sector recorded more investment projects than any other country in Europe last year - and US investment into London was also up 40 per cent,” he went on.

Translation: Woo hoo, we’re in the sunlit uplands and it’s all thanks to little me and my pals!”

Trouble it takes but a cursory read of the introduction to debunk his messaging. In fact you could just look at the title, “Tipping Point”, an apt summation of where the UK is at thanks to the efforts of Fox and his disreputable friends.

The report shows that the UK experienced a 13 per cent decline in FDI projects in 2018 against a 4 per cent decline across the rest of Europe. The UK’s share of all European projects slipped to 17 per cent. That’s the lowest level in two decades.

The decline in manufacturing investment was particularly notable - it recorded a stunning 35 per cent fall.

But the digital side is great, right? They're gagging to invest in that, and digital is, of course, the future! Thing is, even in that sector the figures are nothing like as rosy as Fox portrays them.

The report says the UK’s market share in this area fell to 23 per cent. This shouldn’t come as a surprise to Fox and his colleagues. EY first flagged signs of a challenge to the UK’s leadership last year when its 27 per cent growth was significantly behind the 33 per cent recorded across the continent as a whole.

Care to take a stab at what’s causing figures that a responsible government (I know, I know) ought to be deeply concerned about? It’s pushing it to award a gold star to those who said Brexit because it’s screamingly obvious, as the report makes clear.

Unlike Fox, I’m going to be honest with the numbers. EY asked a panel of 400 investors about the impact of that godawful mess he played a major role in creating and 5 per cent said they had cut their investment. However, that was counterbalanced by 5 per cent increasing it. Where’s the problem then? Some 15 per cent had put their plans to hold, double the previous year.

The investment, jobs, future prosperity etc, is still available for the UK. But EY says that it will “require engagement with investors to address their concerns” before it is released.

The farce of a Tory leadership battle currently taking place isn’t going to help with that, nor is the fact that the front runner is Boris Johnson, a man, remember, who infamously once said “f**k business”.

Fox is correct that the UK has proven attractive to investors from the US. But his highlighting that glosses over yet another troubling finding by EY: It performed badly with most of the other main sources of investment cash, notably the fast growing economies that Fox and his “global Britain” pals say will pour in to replace what is lost through severing the link between us and our former friends and allies across the channel.

There was a striking 65 per cent fall in projects from China, for example, and another big decline in those from the Commonwealth (down to 150 from 192).

EY says that “there is time to act”, noting that only 6 per cent of investors currently plan to move assets out of this country in future. But it calls for an “urgent response” from the government “to avoid a further weakening of (the UK’s) position in the coming years”.

It doesn’t seem like we can expect anything like that from the Secretary of State who apparently prefers whistling Monty Python’s “Always Look on the Bright Side of Life” and having his spin doctors put an unduly shiny gloss on the reality in preference to addressing what authoritative reports like this one have to say.