Rishi Sunak’s big business bash was just smoke and mirrors

Hampton Court, the sprawling palace on the Thames, was famously built by Cardinal Wolsey, who made such a fortune from his position as lord chancellor that he was able to build a home to rival the king’s. When he began to fall out of favour with Henry VIII, he gave it to the king as a present; a wise, if unsuccessful, course of action. Possibly the Cardinal’s best career move was to die of natural causes before he could be tried for treason and executed.

If only the government could somehow persuade today’s billionaires to give it things for free. But without the threat of the executioner’s block, it has to actually work hard to attract money to this country these days.

Still, it has all the pomp and glory of Hampton Court to help it persuade the wealthiest businesses in the world to come to the UK. That is where Rishi Sunak arranged a conference to impress the decision-makers this week with some red carpets, flash cars and King Charkes available for a fine dinner and some selfies.

But none of the money announced was new, as far as I could see. The Spanish owners of Scottish Power promised billions, it is true. But funnily enough, the billions are at exactly the same rate of investment that they have been making for years now. Others were along the line of “we’ll invest billions, if we can find something we like”. A kind of promise but not really worth the paper it is written on.

The real elephant in the room remained unmentioned: why has foreign direct investment (FDI) in the UK fallen for five years in a row? More specifically, why and how has France managed to overtake the UK as the favourite site for FDI in Europe?

It is true the French president attracts foreign money to Paris by holding almost identical events at Versailles, which is even bigger and more glamorous than Hampton Court, but then for reasons we won’t go into, he doesn’t have a king available to press the flesh.

No, the reason we go to all this trouble to attract the giants of international business is that we used to be able to safely assume that we would easily beat the French, and everyone else in the EU, into a cocked hat when it came to the matter of attracting foreign investment. Now we are out of the EU it doesn’t seem that easy anymore.

We still have all those natural advantages that make the UK a desirable site for FDI, a good science base, universities, the legal system, loose employment rights, and the English language. On top of that, we have all those other ‘soft’ attractions which companies never mention when deciding to come here – the private schools, the football, Wimbledon, the arts and the shopping. They all play a part.

But on top of that, overseas companies like reliability, governments that keep their word and consistent policies. They also like their European investments to be in the EU and they also like vibrant successful economies. Oh dear.

Which means the Hampton Court event was little more than Johnsonian boosterism. A bit of bling, some dodgy numbers, a few re-heated announcements, lots of smoke and mirrors and whatever you do, “don’t mention the Brexit”.

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