France is close to overtaking Britain as a location for companies to invest, according to a report from a free-market thinktank that urged the government to cut taxes and make other changes to woo business.
The UK has been losing ground compared to European neighbours in recent years, the Centre for Policy Studies and partner Shore Capital found in its survey of over 100 founders, chief executive, fund managers, entrepreneurs and other “senior figures”, and while it apparently is still more attractive, many such as France, Germany and the Netherlands are “making a concentrated effort to catch up”.
Asked the questions “why choose Britain?”, comments from those surveyed included:
- “Whenever we go to sovereign wealth funds, they say ‘you poor things in Britain – things must be awful’.”
- “The Gulf looks at the UK today as a safety deposit box for real estate and not for opportunities for real growth.”
- “To be frank, most of the wealthy families who are looking for investment targets are looking anywhere apart from the UK.”
- “The direction of travel has been negative for the last 15 years.”
The thinktank, which Margaret Thatcher said “was where our conservative revolution began”, said French president Emmanuel Macron, in particular, has been "setting aside enormous amounts of time to woo both established firms and high-growth newcomers that might normally consider the UK their natural European home".
It noted that in comments from the survey the name of Emmanuel Macron came up so often that "it seems like a positive rarity for a CEO to set foot on French soil without being invited to the Elysée".
As well as urging prime minister Boris Johnson to "lead from the front" like his French counterpart, the thinktank said in the wake of Brexit, Britain "can no longer sell itself as the obvious bridgehead to the European market" and suggested a 10-point plan to move Britain up the league tables in terms of attractiveness to investment:
- Publish a plan to make Britain the most investment-friendly country in the world
- Cancel the corporation tax rise
- Extend the special tax regimes that bring wealth and talent to Britain
- Enhance tax breaks that boost investment
- Reform the regulations that hold back our investment ecosystem
- Introduce cutting-edge regulatory frameworks to capture new markets
- Put a new competitiveness unit at the heart of government
- Renew No. 10’s focus on business and put in place a much better support structure
- Empower city regions to promote themselves as investment destinations
- Promote business-finance-university clusters across the UK
Howard Shore, chairman of Shore Capital, said: “In post-Brexit Britain, it is essential that we re-establish our own economic identity and play to our many strengths as a nation to restore the entrepreneurial environment and enthusiasm that existed during the Thatcher government in the 1980s.”
Robert Colvile, director of the thinktank said: “We know that business is the engine of economic growth. If we are to grow our way out of the current economic malaise, we will need business to do the heavy lifting.”