The latest inward investment figures announced
today by UK Trade & Investment show a “record” 1,744 projects, which according
to Lord Mandelson, means that “Everyday, 215 jobs have been created or
safeguarded due to foreign direct investment”. This sounds like much-needed
good news, but is it actually true? Is there not the slightest bit of scepticism about
a set of results that bucks the current economic trend in such a spectacular
fashion? Closer inspection of the figures shows that more
than half of the projects counted were made up of “expansions, mergers, joint
ventures and acquisitions.” Whilst foreign expansions are almost always
positive, M&A activity is not as clear cut. For this reason, at least a
quarter of the “inward investment successes” should be excluded from these
results.
In the last 12 months there have been many notable
inward investment successes however these are diluted by the government’s
fixation on simply counting projects rather than their true transformational
value. Foreign companies opening up a sales office in London is not
transformational; neither is the acquisition of a UK company by an overseas
competitor.
The headline figure of 78,000 jobs actually
includes “approximately 43,000 safeguarded” – an unclear and questionable counting
criteria favoured by government agencies. The number of “new jobs” created by
inward investment last year was 35,000. To put this figure into some perspective,
the number of jobs lost in just the last month was announced today as 39,000.
We will only begin to appreciate the true picture
of our global competitiveness when the government and its regional development agencies
start to record and publish net figures which take account of jobs and projects
that have been lost to other countries. Today’s inward investment results are
self-serving, misleading and actually prevent a full and frank discussion of
the UK’s true international attractiveness.
Perhaps Lord Mandelson should follow Iran's Supreme
Leader, Ayatollah Ali Khamenei and have the good grace to order a recount.
