Shunning the EU will damage the prospects for foreign investment in Britain

by Callum Anderson

With the dust just beginning to settle on the European election, it has become clear that only Labour can effectively present the case for the UKs EU membership in the run up to the 2015 General Election and beyond.

For those of us, who believe that Britain can only be prosperous by engaging with our EU partners and not isolating ourselves, this only highlights what we have known for months. That is, those of us who are in the incamp – regardless of party affiliation, must begin to illustrate the benefits of Britains EU  membership.

As you may have noticed, I have tried to do my part, and, this time round, lets look at foreign investment.

In 2011, the UK had the second largest stock of inward foreign direct investment (FDI) – attracting $1.2 trillion of investment – in the world, behind only the United States, was recognised the most attractive location for investment in the EU in the 2013 Ernst and Young European Attractiveness Survey. For example, the UK has been successful in attracting Chinese investment; from the EU27, only France attracted more Chinese FDI between 2003 and 2011.

Whats more, over 1,500 investment projects were set up by foreign businesses in Britain during 2012, creating and protecting 170,000 jobs. Investors from America, France, Germany and India saw Britain as a stable and exciting place to invest. For instance, the Tata Group, which owns Jaguar Land Rover, created thousands of jobs in Britain last year, whilst a Malaysia-led consortium led the £8 billion redevelopment of Battersea Power Station, which is expected to provide 20,000 construction jobs and 13,000 permanent jobs.

Similarly, the UKhas been the second most attractive place in the world (behind the United States for FDI in the aerospace sector, with EADS, Bombardier and General Electric heavily investing in Britain, as well as Europes top location for investment in pharmaceutical and biotechnology research and development (R&D), which is the largest contributor to R&D in both the UK1000 and the G1000 in 2008.

So, how would a so-called Brexitaffect investment from our European neighbours. Would it, as many Eurosceptics claim, change nothing? After all, Britain has so many other advantages, both economic and social, that it wouldnt be in the interest of no one to cease investing in the UK. Its difficult

Paul Polman, chief executive of the Anglo-Dutch consumer goods giant Unilever, warned in January that his company would rethink bringing its billions of euros worth of investment into the UK, if it were to leave the EU, stating that Unilever was very concerned about the overall competitiveness of Europe vis-a-vis the rest of the world.

But there is also plenty to suggest that many of our non-European friends would not look kindly on a UK withdrawal. For instance, more than 1,300 Japanese companieshave invested in the UK, as part of the Single Market of the EU, and have created 130,000 jobs, more than anywhere else in Europe. This fact demonstrates that the advantage of the UK as a gateway to the European market has attracted Japanese investment.

Indeed, a lot of evidence suggests that American and Chinese companies view the UK in a similar way. Much of Britains allure would reduce if it were to abandon its EU membership. Indeed, why would an American and Japanese company invest in the UK, knowing that there is no easy access to the richest and biggest single market in the world?

There is no doubt that an engaged Britain that tries to reform the EU from within, instead of walking away will be far better placed to gain even more FDI from our European and non-European partners. For sure, the EU in its current form is in no way perfect. But it would be highly counterproductive for Britain to pull out and, subsequently, put billions of pounds of overseas investment at risk.

With UKIP topping the polls in the European election, largely at the expense of the Liberal Democrats, who lost all but one of their MEPs, it now falls to Labour to be the true party of the European Union. It is imperative that Labour is not afraid to offer a forward-looking, yet honest vision of Britains role in the EU. Indeed, it is Labours duty to put forward the case for Britains EU membership, highlighting the high level of investment that the UK enjoys, amongst other things, largely thanks to its EU membership. With UKIP performing so well in the European elections, the time for Labours hesitation on this issue must end now.

Callum Anderson works at a national charity

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6 Responses to “Shunning the EU will damage the prospects for foreign investment in Britain”

  1. Tafia says:

    only Labour can effectively present the case for the UK’s EU membership in the run up to the 2015 General Election and beyond.

    Snort. Labour couldn’t effectively present a fart in a plastic bag. I am still staggered that I wasted 30 years of membership subs on them.

  2. Mike Stallard says:

    “For sure, the EU in its current form is in no way perfect.”

    I think that the EU is almost certainly going to change radically in the near future. I base this on statements by Viviane Reding, the Justice Commissioner, M. Barroso, the retiring President of the Commission and Guy Verhofstadt who is a front runner to succeed him. When I look at the faces of the people in the EU Parliament while Nigel Farage is speaking, I can be sure that these leaders are not alone in their views that More Europe (a United States of Europe with its own universal Euro, its own elected president and run by the unelected, elitist and unaccountable Commission) is their aim.
    I do not think that anybody in Britain wants that.
    But we do want to be part of the European Common Market – the Single Market.
    How can we do both? Well, by joining EFTA and therefore the EEC. Then we negotiate like fury for better conditions in the two year period of adaptation. It would have only a tiny effect on our economy too.
    Otherwise – Greece, Spain, Italy, Portugal – here we come!

  3. Fred says:

    Well another piece of drivel written by an economically illiterate author presented as hard facts.

    “only Labour can effectively present the case for the UK’s EU membership” As a statement in isolation this is BS.

    You say: “..those of us who are in the ‘in’ camp………, must begin to illustrate the benefits of Britain’s EU membership.” Well you haven’t done so in this piece.

    The level of inward foreign direct investment (FDI) – as detailed in the 2013 Ernst and Young European Attractiveness Survey. Cannot be attributted to the EU. There is absolutely no evidence for this. THIS HAS LITTLE TO NOTHING TO DO WITH THE EU. IF IT WERE THE EU ALL EU COUNTRIES WITH SCORE SIMILLARLY. Moreover genius, how much of this was attributable to the city? How much to favourable tax? How much to cultural ties.

    Investors have always seen Britain as a stable and exciting place to invest. THERE IS NO LINK TO THE EU HERE. Ford sold Tata JLR in a fire sale, it was a brilliant deal for Tata, picking up powerhouse brands for sod all and building them. They know that the brands are associated with the UK. I know Tata and if they could move it to make more money they would. But they cant as the engineering skills and suppliers are all in the midlands. The Battersea Power Stationdeal is a deal in isolation that will make the Malaysian investors money. its got nothing to do with EUROPE!!!!

    Aerospace and pharma. AGAIN Nothing to do with Europe. This is a sector that we have historically been strong in, driven heavily by a large defence budget.

    The reason the UK votes UKIP is that they read articles such as yours and laugh. They listen to UKIP who present the truth and side with UKIP. Now the elite will write off the population as voter fodder. Do you think the public are thick Callum? You’re treating them as such by presenting easily fisked and weak articles.

    Callum Anderson works at a national charity and knows little to nothing about economics or politics in general.

  4. Bill says:

    How old was the fool who wrote this?

  5. simob stokes says:

    Childish mumbo jumbo.

  6. simon stokes says:

    this is rubbish.

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