May 30, 2024
Investments

Government urged to improve conditions for foreign investment into North West


The Government should continue its support for Investment Zones and Freeports to tackle a fall in overseas investment in the North West.

That’s the view of specialist business lawyers at Irwin Mitchell following analysis of industry data.

This showed that, although the UK continues to drive significant interest from foreign buyers, the number of UK firms which were targeted in an overseas deal, such as an acquisition or management buyout, fell to 51 last year compared with 58 in 2022.

The research says London and the South East accounts for four out of 10 foreign investment deals into the UK and also reveals that its dominance has increased in the past five years. It says in 2019, 35% of the companies targeted by foreign investors were based in the capital or the wider region, but by 2023 this stood at 42% of total deals.

Bryan Bletso, partner at Irwin Mitchell and a specialist in advising overseas businesses that are looking to invest in the UK, said: “Despite the dynamic nature of global investment patterns, this data underscores the enduring economic significance of London and the South East in attracting international business interest.

“Our research does, however, also highlight that investment activity in this traditional FDI (foreign direct investment) hotbed is increasing whilst in other regions, such as the North West, deal activity has been rising steadily over the last five years but reduced in the most recent 12 months.”

According to the latest ONS data, FDI into the UK has increased year-on-year for a decade to stand at more than £2 trillion by 2021.

Last November, Conservative peer, Lord Harrington, published a report which called for a change of approach by the Government in terms of attracting FDI. The report made several recommendations and the Government accepted, in its response, that it needed to work more collaboratively with local government and public and private stakeholders.

The Government also says that Freeports and Investment Zones are a part of its FDI strategy.

The Government is committed to establishing 13 Investment Zones across the UK, including two in the North West, in Greater Manchester and the Liverpool City Region. The expectation is that many of the zones and tax sites within them will go live in spring 2024, but so far Liverpool is the only one to have officially done this, announcing details of its proposition at international property conference MIPIM last month.

Bletso added: “Government initiatives such as Freeports and Investment Zones could be a gamechanger for providing favourable conditions for businesses based in the North West, attracting more interest and investment in the UK from abroad, and levelling up the economy.

“Making the UK the top investment destination in Europe, attracting new investment into communities and helping to level up the country, is one of five key priorities for the Department of Business & Trade. Providing tailored support for each investment zone and promoting our offering in this area on an international stage is a crucial part of this.”

Irwin Mitchell published a report last summer which examined the most attractive locations in the UK for FDI. Inner London secured top spot due to its local skills, large economically active population, and many well-respected universities.

In the report’s ‘FDI Attractiveness’ league table, Greater Manchester came sixth, Warrington was 22nd, Liverpool was 25th, and Stockport 34th.

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