UK investment policy Contents

2Defining and measuring overseas investment

8.During the course of our inquiry, it became clear that there are a variety of ways in which overseas investment can be measured; and different claims can be made about the levels of inward investment during a particular period, depending on the measure used. Given that data around levels of investment, and the conclusions drawn therefrom, can affect policy-making, we considered it important to give some consideration to the data published by DIT and others.

Types of overseas investment

9.In measuring overseas investment, a distinction is usually made between: Foreign Portfolio Investment (also referred to as “indirect investment”); and Foreign Direct Investment. Professor Richard Kneller, of Nottingham University, explained that “Portfolio investments tend to be in stocks and bonds whereas foreign direct investment tends to be into a particular business.” In addition, he described the central motivation for portfolio investment as being to obtain “some sort of short-term financial gain”; whereas FDI was driven by a desire to “to acquire assets that allow for managerial control and ownership of the firm” and was hence “more of a longer-term investment”. Portfolio investment was thus associated with much more liquid assets than FDI.6 Dr Lukas Linsi, of Amsterdam University, told us that portfolio investment could be thought of as “speculative”, whereas FDI, on the other hand, could be seen as “productive” investment.7

10.Dr Linsi also told us that, while the distinction between portfolio investment and FDI was clear and straightforward at the conceptual level, applying it in practice, so as to generate statistics, was more problematic. Given the large numbers of investments involved, it was not practically feasible to try and evaluate on a case-by-case basis what an investor’s motivation was. Consequently, statisticians had introduced a convention whereby any investment involving less than 10% of a company was classified as a portfolio investment; and any investment involving more than 10% was deemed to be an instance of FDI. DIT, among many others, adheres to this convention. Dr Linsi, though, saw it as arbitrary and potentially misleading. It led to investments by large funds being misclassified as FDI instead of as portfolio investment. Likewise, “pass-through funds” that were “being shifted through offshore jurisdictions” were also erroneously counted as FDI as a result of the 10% rule.8

11.Dr Linsi further explained that FDI could be broken down into three categories. Firstly, there was “greenfield FDI”, which was “probably the kind of transaction that we typically have in mind when we think about FDI”. This was exemplified by “a company from abroad building a new factory from scratch. We can think of Huawei from China buying a piece of land in Scotland or somewhere else and building a new semiconductor plant.” The second type was mergers and acquisitions FDI, “the takeover by a foreign investor of an already existing company”, a “classic example” of which had been “when Kraft from the US took over Cadbury”. Thirdly, there was “special-purpose entity FDI”, involving “holding company structures”, known as “letterbox companies or shell companies”. Dr Linsi suggested that a typical example of this third kind of FDI was Amazon, which “is very eager to shift as much of its products as possible through Luxembourg because then it has to pay less tax.”9

Measuring FDI

12.The measurement of FDI is usually seen as being of primary importance, given its association with productive investment; and a number of datasets are produced in this respect, by both official and unofficial bodies. However, Dr James X Zhan, Director of the Investment and Enterprise Division at the UN Conference on Trade and Development (UNCTAD), has noted that “the scarcity, unreliability and inconsistency of FDI data pose a serious challenge for policy-makers, academics and practitioners”—and we found this was reflected in our evidence.10

Data on inward FDI projects

13.A standard way of measuring inward FDI is by number of FDI projects (i.e. new or expanded businesses that are wholly or partly owned by overseas investors). DIT publishes statistics by financial year concerning FDI projects that successfully “land” in the UK and the estimated number of jobs thereby created or safeguarded. DIT aims to record all inward FDI projects that meet its eligibility tests (which include the 10% rule).11 For projects it has been involved in, it draws upon data that it holds itself; and regarding those projects in which it has not assisted, it uses data collected by private organisations, as well as “local sources (e.g. media, events)”.12 Each project is subject to a verification process, prior to being confirmed as a “success”, to ensure that it meets eligibility criteria and is genuine; in addition, the quality of data is assessed.13

14.DIT states that the external databases it consults on inward FDI projects include fDi Markets (provided by the Financial Times as part of its fDi Intelligence portfolio of products and services); and the European Investment Monitor (provided by the professional services company EY / Ernst & Young).14 However, the statistics produced from these databases are not the same as DIT’s, due to “methodological differences”.15

15.Dr Henry Loewendahl (CEO of the company WAVTEQ and Senior Vice President representing fDi Intelligence) worked on developing, and continues to be involved with, the fDi Markets database, which specifically tracks greenfield FDI projects. He told us that the data produced by the private sector included “a lot of estimates of capital investment and job creation” that “may not always be very accurate”. He thought that “It really should be the role of DIT to be making sure it has a very accurate dataset”, but DIT was drawing on private sector estimates of job creation that were in fact “rather suspect”; the actual figures were likely to be “very different.”16 This point was reinforced by Dr Ilona Serwicka, of the UK Trade Policy Observatory who, looking at the fDi Markets database, had “found that about 80% of numbers for job creation and value of investment have been estimated.”17

16.Dr Loewendahl further told us that there was “a huge problem with the DIT data”, in that “they do not track how many companies close down or how many companies downsize”. He likened the Department to the head of a business who told their shareholders that “’We won all these new clients this year’ but I am not going to tell them how many we lost. You would not survive very long as a business.”18

17.We put Dr Loewendahl’s points to the Secretary of State for International Trade, Rt Hon Dr Liam Fox,19 when he appeared before us in March 2019. He told us: “We can only make judgments on the data that is available and whether that is kept centrally or not”. He stressed that “One of our big problems […] is access to trade data and business data” which “does need to improve”. One of the features of recent legislation had been “to give us better access to that data.” He said that “If we are able to improve our database we will”.20

18.The usefulness of project numbers as the main measure of FDI has been doubted by several ministers. The then Investment Minister, Mark Garnier, conceded in September 2017 that it put on the same level establishing a new factory costing £50 million and “opening a chip shop in Barnsley for £50,000”.21 Greg Hands, the then Trade Policy Minister, made a similar admission to us in March 2018, but noted that this form of measurement was “the internationally accepted norm in this space”.22 When the present Investment Minister, Graham Stuart, gave evidence to us in June 2019, he told us that he had been sceptical when told that measurement by project numbers was the global standard: “I thought that was mad.” He had, though:

come around rather more to recognising the utility of the project number, because everything else is so hard and elusive to get hold of. As long as you measure the same thing over time, at least you get a decent sense of trend.

Nonetheless, the Department was now looking at also measuring the value of FDI in terms of Gross Value Added (GVA): “We are doing work on that and we hope we will be able to publish details on that, going forward […] we want to work out the real economic value”. He admitted that it was “extraordinarily elusive, but we have got a lot of people working on it and I hope that we will be able to share results of that with you in due course.”23 The use of GVA in this way relates particularly to the targeting of investment promotion and investment facilitation, which we consider under that heading in Chapter 4.

Data on FDI flows, stocks and earnings

19.The ONS measures FDI in a different way. It publishes data by calendar year relating to the financial value of both inward and outward UK FDI in respect of:

20.Two international organisations, UNCTAD and the Organisation for Economic Co-operation and Development (OECD), publish data on UK FDI stocks and flows derived from the published ONS figures, as part of global FDI datasets. Jonathan Athow, Deputy National Statistician and Director General for Economic Statistics at ONS, did, however explain that UNCTAD “tends to take an early version of our data, our initial estimates” and that “sometimes they will not have the most up-to-date numbers.25

21.Mr Athow told us that ONS’s work on FDI was focused on the “balance of payments: how much money is flowing in and out of the UK”; this was then attributed to FDI, portfolio investment “or other flows”.26 The data was obtained by surveying companies identified from a business register as having “foreign parents or foreign subsidiaries”.27

22.DIT has identified a number of “limitations” in the ONS data. Being “dominated by mergers and acquisitions”, they “can be very volatile and cyclical”; and they are “prone to revisions”. Since they do not record the ultimate investing country, they “can be distorted by trans-shipping or ‘pass-through investment’”. And there are “asymmetries” between ONS’s records on outward investment to particular countries and the destination countries’ corresponding data on inward investment from the UK.28

23.Mr Athow acknowledged that distinctions between greenfield and other types of investment could not be determined from ONS’s data, which were comprehensive but often lacked detail. The Office would like to work with DIT to achieve “a much more granular understanding of what is going on”. He explained that it was, though, “a challenge for us, as statisticians, to think about how we bridge [the] gap” between ONS’s “top-down” figures (derived from the balance of payments) and the “bottom-up” figures on project numbers compiled by DIT.29 He also told us that, while “many companies want to work with us”, it was a challenge to reconcile commercial data with that from other sources;30 and constructing long-run datasets from private-sector sources was difficult, given the discontinuities that were involved when it came to that sector.31

24.Dr Loewendahl stressed to us the importance of being able to separate out different types of FDI in data on flows:

When you look at the top-level numbers in most developed economies, basically what you are seeing is who has been most successful in selling their corporate assets to other foreign companies, because most of it is [mergers and acquisitions].32

This applied to the UK. Expected UNCTAD data that showed sharply rising UK FDI inflows, and falling FDI outflows, for 2018 would lead, Dr Loewendahl thought, to “everyone talking about how amazing the UK is […] but it is all driven by [mergers and acquisitions]”.33

25.Dr Loewendahl noted that the US was the “first country in the world and the only country in the world” thus far to distinguish greenfield investment from mergers and acquisitions in statistics on FDI flows. The US Bureau of Economic Analysis (BEA) had begun publishing such data in 2017, revealing that 97% of US inward FDI in 2016 was accounted for by mergers and acquisition. The US data also distinguished between new investments and the expansion of existing investments, and gave figures for associated employment.34 Dr Linsi also noted that the BEA had for a long time been tracking Special Purpose Entity FDI. (He believed that ONS had “some experimental statistics” that also attempted to capture this.)35 Mr Athow said that ONS would like to “replicate what the BEA does” in this regard.36

26.When Dr Fox appeared before us in March 2019, he admitted that “you can get big distortions in inward investment from M&A activity” and offered to share “any detailed information that we have on any disaggregation of that data, for which we hold quite a lot”.37 However, when he subsequently wrote to us about this he did not state what the Government was doing to obtain better data in this regard.38

Recent trends in inward FDI

27.The headline figures on inward FDI projects that have been published by DIT since it took over responsibility for publishing these data from UKTI, in 2016, are shown in Table 1.

Table 1: DIT data on inward investment results

Year

FDI projects

New jobs created

Safeguarded jobs

Total jobs

2015–16

2,213

82,650

33,324

115,974

2016–17

2,265

75,226

32,672

107,898

2017–18

2,072

75,968

15,063

91,031

2018–19

1,782

57,625

6,998

64,623

Sources: Department for International Trade, DIT inward investment results: Summary of FDI projects and jobs 2017 to 2018, June 2018; DIT inward investment results: Summary of FDI projects and jobs [2018 to 2019], June 2019

Table 2 contains the headline figures published by ONS on inward and outward UK FDI for calendar years from 2015 to 2017 (the most recent year for which finalised data have been published). Mr Athow said to us that it was difficult to tell much regarding recent trends from ONS’s dataset on FDI flows, since the data had been distorted by some large-scale purchases of UK companies in 2016, as well as abnormally high mergers and acquisitions activity in 2017.39

Table 2: ONS data on inward and outward FDI (£ billion)

Year

Flows

Positions

Earnings

Inward

Outward

Inward

Outward

Inward

Outward

2015

25.3

-42.9

1,032.5

1,084.0

48.2

57.2

2016

192.0

-27.7

1,187.3

1,274.6

50.3

51.3

2017

92.4

91.4

1,336.5

1,313.3

54.8

85.9

Source: Office for National Statistics, Foreign direct investment involving UK companies: 2017, December 2018

28.It is easy to see how a variety of claims can be made about trends in UK inward FDI using these data. For example, it is true that in 2017, the UK’s position (stock) of inward FDI was higher than in 2015—by almost 30%. At the same time, it also true that in each year since 2015–16, the number of jobs created and safeguarded by FDI projects has fallen.

29.As we have noted, there are also various non-official sources of data on UK FDI—and these are often cited by the Government. So far this year, for instance, DIT has cited data published by Deloitte,40 UNCTAD41 the OECD,42 fDi Intelligence43 and EY44 on trends in UK inward FDI and comparisons between the UK and other countries in this respect. In so doing, the Government has presented a positive picture of UK inward FDI trends in the context of Brexit. For example, the Minister for Investment told the House in March this year that:

This is a truly grim and sad time for those who want to see our departure from the EU lead to a collapse in investment and exports, as instead we have seen the exact opposite. We had record levels of foreign direct investment in this country.45

In the same month, the Secretary of State told us that, while domestic investment decisions had been held back because of uncertainty around Brexit, “foreign direct investment into the UK, including from Europe, has been very strong because we have strong economic fundamentals”. Investors saw the UK’s low unemployment rate and “all the advantages we have in a flexible workforce and our universities, access to tech and so on, which makes [the UK] a good bet for the long term”.46 Officials at the UK Embassy in Tokyo, meanwhile, assured us during our visit there that the UK’s advantages in terms of matters such as the predominance of the English language and the established rule of law would not change because of Brexit. However, we did hear some less sanguine views from other quarters.

30.Professor Kneller told us that FDI could be seen in terms of: horizontal motives (replicating a business model abroad); vertical motives (hosting parts of a production process abroad); and export platform motives (using a foreign country as a base to sell into another market). The determinants of FDI that affected these models included “infrastructure and taxation and corporate taxes but also tariffs, labour costs, human capital and so on”; other “key determinants” were “the size of the markets and how wealthy firms and businesses in those markets are”. Professor Kneller suggested that, in a “post-Brexit world” where tariffs potentially arose between the UK and the EU, export-platform and vertical-motive FDI were bound to be affected, due to the impact on “the ability to move the different components, the different intermediate inputs across national borders”.47 In Tokyo, we heard that this model applies to Japanese investors, who use the UK as a “gateway” to export to the rest of the EU and are hoping for as frictionless trade as possible after Brexit, as well as some commonality of rules.48 The lack of certainty about the terms of Brexit was very concerning for Japanese businesses and making investment decisions difficult. We similarly heard in Seoul that the lack of certainty was what most troubled Korean companies about Brexit.

31.Courtney Fingar, Editor-in-Chief of fDi Magazine (which is published by the Financial Times as part of its fDi Intelligence portfolio), told us that UK “greenfield FDI, real FDI” was typically “not very volatile”, as it rested on “long-term decisions and the UK has been a strong performer throughout the years”. She argued this was less down to favourable levels of corporation tax than to matters such as the UK’s skills base. Ms Fingar stated that:

The only thing that has dented or had any significant impact on the UK’s attraction of greenfield investment has been the referendum to leave the European Union, where we saw a sudden and very notable decline in greenfield FDI.49

She went on to explain that the UK had been “one of the best and most reliable performers for greenfield FDI over the years”, even after the 2008 financial crisis; but there had been a 38% decrease in greenfield FDI in 2016; and a 10% decline in 2017.50 Conversely, she thought that the decline in the exchange value of the pound since the Brexit referendum had been a factor in the continued strength of inward investment in the field of mergers and acquisitions.51

32.Dr Serwicka reported that her analysis of the fDi Markets database revealed there had been a fall in numbers of greenfield investment projects since 2016 of around 10%.52 She admitted that there was “some level of doubt” as to whether this could be attributed to Brexit, but “we believe so because of the timing”.53 Dr Serwicka had not yet been able to determine whether this reduction was due to investments being delayed, due to present uncertainty, or permanently cancelled.54

33.Dr Loewendahl added that: “From 2015 to 2018, the number of FDI projects, greenfield projects in the UK, declined by 25%. The number of manufacturing jobs created by FDI and the capital investment associated with those investments is down over 50%.”55 The fact that “the projects have gone down lower than the jobs and the capital investment” indicated “that some projects are being put on hold”. Investment in the UK had gone from “a very high level down to still a high level, higher than most other countries in Europe. It is not doom and gloom.”56 Notably, though, “Financial services FDI and greenfield investment has boomed in 2017 in the Netherlands, France, Germany, Switzerland and Ireland”, which Dr Loewendahl suggested was down to companies moving their operations due to Brexit.57

34.The Institute of Directors (IoD) stated in evidence that “It is at this stage difficult to gauge even the potential effect of Brexit on future investment flows to and from the UK.” Many businesses were waiting “until the road ahead becomes clearer before making any substantial investment decisions”.58

35.When the Investment Minister appeared before us in June 2019, we asked him about OECD data showing that UK inward FDI flows had fallen by a third in 2018.59 He responded that “flow goes up and down. That is the nature of things. The better measure to judge how we are performing as a nation—although flow should form part of our understanding—is to look at stock.”60 He advised against seeking “specific reasons” for fluctuations in flow from year to year; rather than constructing “a narrative to fit your particular political view”, one should accept “that it is primarily down to big global forces and patterns of investment”.61 We also put to the Minister the fact that, according to the OECD data, in 2018 the Netherlands overtook the UK as the third largest recipient of FDI inflows. He argued that not too much should be read into the “technical overtaking of the UK in that one particular year”. He reiterated that the more important measure was inward FDI stock, which was higher in the UK. Also, large numbers of “special purpose vehicles and other financial vehicles” were based in the Netherlands, meaning that there was “some uncertainty” as to how far inward FDI flows represented “actual investments that employ real people”.62 The OECD data does, however, explicitly exclude resident Special Purpose Entities in the Netherlands.63

36.The Minister noted that global FDI flows had fallen by 19% in 2018.64 He said that “in terms of global flows, it has been a challenging environment of late. I would just say, objectively, particularly in the context of Brexit, that the UK’s performance is pretty remarkable.”65 Regarding UK inward FDI stock, he told us that this was at record levels;66 and, according to the OECD, UK inward FDI stock had grown by 5% in 2018.67 In subsequent correspondence, he stated that “The growth in stock in the UK contrasts with net FDI disinvestment both in Europe and globally in 2018.” He noted that “Investment flows into the UK declined in 2018”, but this was just a case of normal volatility. Previous falls in 2014 and 2011 had not raised “concerns around the fundamental attractiveness of the UK economy”. Also, the UK’s share of European investment had remained stable.68

37.The Minister insisted to us that the UK led Europe in respect of “stock, flow, projects, greenfield, capital expenditure, and new jobs”, according to UNCTAD, the OECD, EY and fDI Markets. UNCTAD had found the UK to be third in the world for FDI stock, behind only the US and China. EY’s Global Capital Confidence Barometer survey of global executives had found that respondents named the UK as the most attractive destination in the world for mergers and acquisitions, for the first time in the 10 years over which the survey had been conducted.69

38.We questioned the Minister closely about a recent report in the Financial Times based on fDi Markets data. This stated that the value of capital invested in greenfield FDI projects in the UK had fallen by 30% in the three years to the first quarter of 2019, whereas in the rest of the EU it had risen by 43%. A representative of fDi Markets was reported to have said it was “clear that neighbouring countries are beginning to reap the benefits of the uncertainty being caused by Brexit”.70 Mr Stuart replied that the fDi Markets database also showed that in 2018 “the UK had more than twice as many new greenfield investments […] than Germany and France put together”.71 In the same year, according to the same source, “UK FDI greenfield projects grew by 19%, and capital expenditure by 38%”.72 The Director General for Investment at DIT, Mark Slaughter, added that the Financial Times’s analysis was narrowly focused on “a market share diminishment of the capital associated with new greenfield investment”.73 In his subsequent letter, the Minister wrote that the Financial Times had used “a particular time period and data point” which “provided an especially stark difference” between the UK and the rest of the EU, “because 2015 was an outlier year”. While the UK’s market share for greenfield FDI capital expenditure had “diminished” in recent years, the country had consistently remained “the single highest grossing individual country” in this respect.74

39.We also asked the Minister about the EY Attractiveness Survey, which showed that in 2018 there had been a 13% fall in UK inward FDI projects—with a 35% fall in manufacturing projects. EY also found that 15% of inward investors surveyed had paused or stopped investment in the UK specifically due to uncertainty around Brexit.75 Mr Stuart repeated that what mattered was the record level of UK inward FDI stock and the fact that the UK had received more inward greenfield FDI projects in 2018 than Germany and France combined.76 He suggested that “If you are determined to find a negative Brexit explanation, you can cherry-pick the data.”77

40.Referring to ONS statistics on UK inward FDI flows, the Minister said that this was the “most definitive” dataset.78 However, preparation of the statistics took nearly a year; thus, the data for 2018 would not be published until December 2019.79

41.In his letter, Mr Stuart mentioned that DIT’s latest data on UK inward FDI projects showed a decline of 15% in 2018; this was “broadly in-line with” EY’s Attractiveness Survey and reflected “the context of global declines in FDI”. It illustrated “the complexity of interpreting FDI data that is collected in different ways and fluctuates over time”, but it was “clear that the UK remains the leading destination for investment in Europe”, whether measured in terms of projects or stock. He noted that “Echoing the conclusions in the recent UNCTAD World Investment Report, DIT has observed no clear impact of Brexit on FDI levels in the UK.”80

Conclusions and recommendations

42.Appropriate and effective Government policies in respect of Foreign Direct Investment can only be formulated on the basis of reliable information on the nature and extent of such investment, and how it varies over time. However, there are significant limitations in the data which the Government collects and publishes in this regard.

43.Figures published by the Department for International Trade relating to numbers of new projects, and of jobs associated with them, are of limited usefulness, given that the Department does not monitor closures of companies associated with inward investment, or downsizing by such companies. We recommend that the Department should consider what steps it can take to make good these deficiencies in its data and report to us on this by the end of this year.

44.The Department also relies in part on data from private-sector databases, which can be opaque and may be of limited reliability. Where the Department does draw on any private-sector datasets in constructing its own statistics, we recommend that, so far as possible, it should seek and publish information about the sources and methodology employed by the bodies concerned.

45.The Office for National Statistics publishes data on the capital value of inward Foreign Direct Investment—but it does not separate out greenfield investment from mergers and acquisitions, or from investment through Special Purpose Entities. We note the Office’s desire to generate better data in this regard, possibly by finding ways of reconciling its “top-down” figures (derived from the Balance of Payments) with the “bottom-up” data (relating to specific investment projects) that is gathered by the Department for International Trade. We recommend that the two departments report to us, by the end of this year, on what they are doing to develop such collaboration. We also recommend evaluation of the methodology employed by the US Bureau of Economic Analysis as a possible model for generating a reliable dataset on the capital value of the different categories of inward Foreign Direct Investment.

46.The Government regularly cites statistics on Foreign Direct Investment from various sources; in doing so, it needs to be careful not to risk giving the impression of cherry-picking figures so as to convey the most favourable impression possible. In the presentation of investment data, care must be taken always to give the full picture, with clear distinctions made between: stocks and flows of investment, greenfield investment, and mergers and acquisitions; and year-on-year changes and multi-year trends. We recommend that the Department for International Trade should consider commissioning the Office for National Statistics, or some other appropriate body at arm’s length from the Government, to publish on a regular basis a comparison and synthesis of the various statistical data-sources on UK Foreign Direct Investment, to give the fullest possible picture of trends and developments.


6 Q2

7 Q25

8 Q4

9 Q13

10 UN Conference on Trade and Development, “Bilateral FDI Statistics”, 2014

11 Department for International Trade, Inward Investment Results 2018–19 Technical Annex, June 2019, p 8; see also Department for International Trade, Annual Report and Accounts 2018–19, HC (2017–19) 2229, p 39.

12 Department for International Trade, Inward Investment Results 2018–19 Technical Annex, June 2019, p 7; see also Department for International Trade, Annual Report and Accounts 2018–19, HC (2017–19) 2229, p 39.

13 Department for International Trade, Inward Investment Results 2018–19 Technical Annex, June 2019, pp 10–11; see also Department for International Trade, Annual Report and Accounts 2018–19, HC (2017–19) 2229, p 39.

14 Department for International Trade, Inward Investment Results 2018–19 Technical Annex, June 2019, p 7; see also Department for International Trade, Annual Report and Accounts 2018–19, HC (2017–19) 2229, p 39.

15 Department for International Trade, Inward Investment Results 2018–19 Technical Annex, June 2019, p 11. See also Department for International Trade, Inward Investment Results 2016–17, July 2017, p 15; Department for International Trade, Annual Report and Accounts 2018–19, HC (2017–19) 2229, p 39.

19 Shortly after this report was agreed by the Committee, on 24 July 2019, Dr Fox was succeeded by Rt Hon Elizabeth Truss as Secretary of State for International Trade and President of the Board of Trade.

20 Oral evidence taken on 6 March 2019, HC (2017–19) 436, Qq819, 821

21 HC Deb, 12 September 2017, cols 223–4WH

22 Oral evidence taken on 7 March 2018, HC (2017–19) 481-vii, Q382

23 Q245; see also Q297.

24 Q6; Office for National Statistics, “An analysis of Foreign Direct Investment, the main driver of the recent deterioration in the UK’s Current Account: January 2016”; Department for International Trade, Inward Investment Results 2016–17, July 2017, p 15; Department for International Trade, Estimating the economic impact of FDI to support the Department for International Trade’s promotion strategy: Analytical report, June 2018, pp 13–15; Department for International Trade, Inward Investment Results 2018–19 Technical Annex, June 2019, p 11. FDI data can be presented on an asset and liability basis (where the focus is on FDI as a constituent of the Balance of Payments) or on a directional basis (where the primary focus is on FDI as such) – Q7; Department for International Trade, Trade and Investment Core Statistics Book: Technical Annex, November 2018, p 18; Office for National Statistics, “Foreign direct investment involving UK companies: 2017”, December 2018. ONS publishes FDI data of both kinds, but in this report we are only concerned with that which is compiled on a directional basis.

25 Department for International Trade, “Overview of other data sources for inward FDI”, June 2019; UN Conference on Trade and Development (UIP0022); Q31

28 Department for International Trade, Trade and Investment Core Statistics Book: Technical Annex, November 2018, pp 18–19

35 Q5

37 Oral evidence taken on 6 March 2019, HC (2017–19) 436, Q818

38 Rt Hon Dr Liam Fox MP to Angus Brendan MacNeil MP, 4 April 2019

40 Department for International Trade, “International Trade Secretary in Davos to get trade continuity agreements over the line”, January 2019; Oral evidence taken on 6 February 2019, HC (2017–19) 436, Qq614–616; Oral evidence taken on 6 March 2019, HC (2017–19) 436, Qq818, 819; Rt Hon Dr Liam Fox MP to Angus Brendan MacNeil MP, 4 April 2019; Department for International Trade, Annual Report and Accounts 2018–19, HC (2017–19) 2229, p 7

41 Department for International Trade, “International Trade Secretary in Davos to get trade continuity agreements over the line”, January 2019; Oral evidence taken on 6 February 2019, HC (2017–19) 436, Qq614–616; Oral evidence taken on 6 March 2019, HC (2017–19) 436, Qq818, 819; Rt Hon Dr Liam Fox MP to Angus Brendan MacNeil MP, 4 April 2019; Department for International Trade, “Inward investment brings 4,800 new jobs a month to the UK”, 26 June 2019; Department for International Trade, Annual Report and Accounts 2018–19, HC (2017–19) 2229, p 34

43 HC Deb, 6 June 2019, col 251; Department for International Trade, “Inward investment brings 4,800 new jobs a month to the UK”, 26 June 2019; Department for International Trade, Annual Report and Accounts 2018–19, HC (2017–19) 2229, p 34

44 Department for International Trade, “Inward investment brings 4,800 new jobs a month to the UK”, 26 June 2019; Department for International Trade, Annual Report and Accounts 2018–19, HC (2017–19) 2229, p 7

45 HC Deb, 29 March 2018, col 910

46 Oral evidence taken on 6 March 2019, HC (2017–19) 436, Q819

47 Q8

48 See also Honda Motor Europe (UIP0021).

57 Q49; see also Q52.

58 Institute of Directors (UIP0015)

59 Organisation for Economic Co-operation and Development, “FDI in Figures”, April 2019, p 3

63 Organisation for Economic Co-operation and Development, “FDI in Figures”, April 2019, p 3

64 Q214. This statistic derives from UNCTAD’s Global Investment Trends Monitor no. 31, January 2019.

68 Graham Stuart MP to Angus Brendan MacNeil MP, 28 June 2019

69 Q215; see also Department for International Trade, Annual Report and Accounts 2018–19, HC (2017–19) 2229, p 7.

74 Graham Stuart MP to Angus Brendan MacNeil MP, 28 June 2019

80 Graham Stuart MP to Angus Brendan MacNeil MP, 28 June 2019




Published: 30 July 2019