- On 30 March 2023, the Treasury published the terms of a review of foreign direct investment (FDI), focusing on how the UK can better attract FDI into key growth sectors (digital technology, creative industries, life sciences, advanced manufacturing and green industries). In November 2022, the results of the review and the government’s response were published.
- The report highlights that while the fundamentals of investment into Britain are strong, the requirements for FDI over the next decade are substantial and the competition for global capital is increasing.
- The report suggests six key recommendations, including greater clarity and certainty from government to businesses, an increased profile for investment within government, more regional growth initiatives, a significant role for the Office for Investment (OFI), listening more to business feedback, and strategically targeted incentives.
- Tax was explicitly out of the review scope, however, it is still relevant for incentives more generally as part of the wider government’s drive to increase the UK’s investment attractiveness.
- The latest round of UK statistics on FDI were released in June 2023 by the Department for Business and Trade. The statistics show that 1,600 FDI projects will create nearly 80,000 jobs across the UK.
- In addition to the action the government plans to take on FDI, the Chancellor announced in the Spring Budget 2024 that he would encourage more investment into UK companies from UK pension funds and savers. Pensions funds will now be required to disclose how much they invest in British companies, whilst savers will now be able to save an additional £5,000 a year in a new British ISA.
- Timing: the review commenced in April 2023, and produced findings in November 2023. The government has not given specific timescales but has accepted most of the report’s recommendations in principle. Businesses will have to wait to see how policy develops in this area.
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