United Kingdom: Business Competitiveness

Debate between Lord Bilimoria and Lord Pitt-Watson

Tuesday 1st September 2026 Lords Chamber

[Lord Pitt-Watson (Lab)]

I absolutely do think that we should be backing business. I hope there is some assurance in the first speech that the Chancellor of the Exchequer made when he said that he was just as concerned about the cost of doing business as he was about the cost of living. This Government have done lots of things to generate competitiveness. One is fiscal credibility. Another is the trade deals. A third would be the industrial policy. Perhaps we are beginning to see in the things that businesspeople are saying that although there is some bad news—there is always some bad news—there is also good news. For example, earlier this year 46% of members of the British Chambers of Commerce expected to grow this year, relative to 35% last year. I could quote many business organisations and individuals who are essentially saying that Britain is on the up and a great place to invest.

[Lord Bilimoria (CB)]

My Lords, I speak as the chair of the International Chamber of Commerce UK. This country has been a magnet for inward investment over the years, yet over the last decade the number of foreign direct investment projects is at its lowest level for many years. I congratulate the Minister on his appointment, but will he acknowledge that a reason for this is the highest level of taxes that we have had in 80 years? That is eroding our competitiveness, our attractiveness as an investment destination and, most importantly, growth. Ireland next door reduced its corporation tax to half ours at 12.5%, has grown rapidly and is a magnet for inward investment.

[Lord Pitt-Watson (Lab)]

We would all like tax to be as low as possible and investment to be as great as possible. Britain is the number two destination for external investment, according to the PwC CEO survey; the United States is number one. Huge investment is taking place in this country—£360 billion in the areas that have been identified for our industrial policy. The chief executive of Lloyds Bank said it is a “phenomenal” place to invest. Although one needs to be careful about the enthusiasm of entrepreneurs from Silicon Valley, Jensen Huang of Nvidia said it is

“a great place to invest … You’re the envy of the world”.

Of course we want to have more investment, but equally we are seeing that growth is coming—in the last six months, the highest in the G7—and last year productivity was the best for 10 years if you take out the effect of the pandemic.