Post-Brexit foreign direct investment in the north skyrockets 72 per cent
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Post-Brexit foreign direct investment in the ‘northern powerhouse’ has skyrocketed by 72 per cent compared to the rest of the UK, a new report has shown.
Investment in the north rose from £24bn between 2012-16 to £41bn after Britain left the European Union, from 2017-21.
The findings, by the Northern Powerhouse Partnership, also found the north increased its share of FDI into England, from under a fifth to a third.
The report claims the region is now punching above its weight, constituting less than a third of the overall population of England, while the rest of England experienced a major drop in FDI, including a 50 per cent fall from Asia.
The Department International Trade added that UK inward FDI stock increased from over £1.9 trillion to nearly £2.3 trillion in 2021, with 85,000 new jobs created.
Secretary of State, Kemi Badenoch responded to the report, saying: “Trade creates jobs and helps grow our economy. In the last five years, overseas investment has created more than 50,000 jobs in the Northern Powerhouse. That is great news for communities across this thriving, innovative region”.
In wake of last week’s mini-budget, which included numerous policy reversals and tax cuts, she added the “bold tax-cutting agenda” will “put more money back in the pockets of hard-working Brits, allow businesses to invest more of their profits, and boost our attractiveness to overseas investors.”
Brexit
Henri Murison, chief executive of NPP, said :“The challenge of Brexit is that it created short term uncertainty, so investors from Asia in particular who were looking for an entry point to EU markets have been deterred.”
However, the North bucked this trend – demonstrating that despite headwinds, the Northern Powerhouse has been a huge success as a global Foreign Direct Investment proposition.”
Lord Jim O’Neill, vice-chair of the Northern Powerhouse Partnership, said: ““We have been particularly successful in Asia – while the rest the UK has seen FDI from Asia plummet $28bn, 56 per cent, over the last five years, it’s gone up 7 per cent in the North.”
“This is proof of the North’s economic potential, especially in innovative and green industries. If the rest of the world sees it, then our own government should be putting us front and centre of their growth strategy.”
Jonathan Reynolds, shadow business secretary, accsed the Government of “failing to make the most of the successful innovation that is happening here.”
“This report is great news, but we must build on this success with long term consistent plans that businesses can invest alongside.”