Office for Investment

Julie Marson Excerpts

Tuesday 20th April 2021 Westminster Hall

[Ian Paisley (in the Chair)]

I remind hon. Members that there have been some changes to normal practice in order to support the new hybrid arrangements. I remind Members participating virtually that they are visible at all times, both to one another and to us in the Boothroyd Room. If Members attending virtually have any technical problems, they should of course email the Westminster Hall Clerks’ email address. Members attending physically should clean their spaces before they use them and before they leave the room. I also remind Members that Mr Speaker has stated that masks should be worn in Westminster Hall, unless you are speaking.

[Julie Marson (Hertford and Stortford) (Con) [V]]

I beg to move,

That this House has considered the role of the Office for Investment.

It is an honour to serve under your chairmanship, Mr Paisley, and a real pleasure to be able to debate this issue, which is of huge importance to, and presents huge opportunities for, our country’s future growth. I am especially pleased to be having this debate not only because foreign direct investment—FDI—is so important to the national economy, but because it is so relevant to many of my constituents. We in Hertford and Stortford are part of the world-renowned innovation corridor, and our local life sciences sector is one area of particular opportunity and attractiveness to foreign investors.

The Government unveiled their plans for the Office for Investment in November last year, specifically designed to attract FDI into the UK. The aim is to connect public and private sector expertise in order to drive investment into all parts of the UK. I am particularly pleased that that has such strong and specific support from the Prime Minister in No. 10 and the Treasury. It is a Government priority at the highest level. We have long been a global centre of FDI in this country. FDI stock levels reached £1.6 trillion by the end of 2019. We have traditionally been the top FDI destination in Europe, and according to the World Bank we are second only to Denmark in offering the best business environment in the world. That has been so crucial to the success of our start-up ecosystem, and it is why so many businesses want to come here.

We have maintained our FDI leadership in Europe when many thought that we could not, or would not, post the EU referendum. FDI markets reported that between July 2016 and September 2020 foreign investors announced nearly 5,000 UK projects, more than Germany and over 50% more than France over the same period. The impact that that success has had on UK venture in particular has been huge. It has helped to fuel a world-beating venture sector that has insulated the UK’s start-up and scale-up communities from many of the global shocks of the past decade. Interventions of the past decade to usher in new FDI have made major contributions to our world-renowned and highly enviable start-up and small and medium-sized enterprise ecosystem, which has in turn nurtured and enabled so much growth in new, and sometimes brand new, parts of our economy.

However, covid has taken its toll on FDI right across the globe, including here in the UK. There was a 49% global drop in FDI flows in the first half of 2020, which will already have had profound consequences for our economies and prospects for future growth, but it is true to say that negative trends had already started to emerge before the outbreak. Between 2018 and 2019, the UK’s FDI flows had already fallen by £6 billion, well before we had even heard of covid. We cannot blame covid for all of a trend that had already begun, and we have to respond with purpose. That is fundamental to the short-term health and recovery of our economy, as well as to our long-term growth prospects. Central leadership is needed to unblock the most complex cases and put FDI at the top of the UK’s agenda. The Government have set out how this new office will provide that leadership, and I am sure the Minister will confirm that the Government will ensure that the Office for Investment is given the necessary prominence to make a real difference and command the authority to work with Departments beyond the Department for International Trade to truly work across Whitehall, catalysing activity across all Departments.

The UK’s overall history of FDI is a story of success. Even now we are competing well, despite a recent dip, but a closer look at data reveals a divided country, which poses problems for the UK’s future. Since 2016, London and the south-east has increased its share of total FDI projects to more than 51%. That clearly has an impact on regional inequality and the spread of opportunity—an issue that I know the Government and the Minister are well aware of and are determined to address. Could the Minister explain how the Office for Investment will use its influence to guide investment to different parts of the UK? Data also shows that devolved Administrations have an advantage in securing FDI, compared with English regions outside London. I should be very interested to hear how the Minister intends the office to work for the entire country, to elevate areas previously left behind and provide a coherent, co-ordinated strategy.

Bringing new investment to all parts of the UK is at the heart of the Office for Investment’s purpose. I am keen to use a little more time to discuss the importance of a regional approach to FDI, because it is in the regions that we will discover the most untapped new potential. Most new wealth over the next few years will be created through emerging industries such as green energy; it will not come from the already saturated markets that make up most of today’s FTSE 250. London’s market simply does not have as much capacity for new growth as those of the regions. Off the back of the pandemic especially, we have a great opportunity to develop new powerhouse regions to match the might of London. Right now, the gap between the most and least productive local enterprise partnerships is growing, but a balanced FDI strategy can help reverse that trend and level up our economy and regions.

It seems obvious that FDI is one of the keys to scaling the success of the many positive and innovative announcements made in the Budget last month, such as the super deduction and freeports. For every FinTech hub in London we need a thriving life sciences sector somewhere else. With better levels of FDI in regions, skills will follow investment, providing new opportunities to retain the best talent and attract it from afar.

It is equally important to recognise that FDI is not just vital for the start and scale-up sector of business. The biggest and most established companies also seek opportunities to expand and invest around the globe. We are right to demonstrate our ambition and commitment to get them investing here, where their FDI will create more jobs, improve productivity and unleash research and development investment.

As important as a regional approach to FDI is to the future of our economy, equally important are the sectors that the Office for Investment will target. To compete globally in 10 and 20 years’ time, we have to pinpoint the right markets that will one day lead the world. It may be that the FTSE is stocked with establishment banks and oil companies at the moment, but it will not be those industries providing the high-growth success stories of the next decade and more. New wealth will rely on fledgling, disruptive sectors—some growing now, some to be established and some just dreamed of. Could the Minister explain how the Office for Investment will better enable the UK to attract FDI in those strategically important sectors for our long-term growth ambitions?

I was extremely pleased to see that we have secured the new sovereign investment partnership with the United Arab Emirates, announced last month. From the Government’s £200 million investment in life sciences we have leveraged a further £800 million, giving a total investment inflow of £1 billion, all negotiated through the Office for Investment. This is a blueprint for success, which is so impressive and so important.

As a cricket fan I have used cricket analogies before, but I feel it bears repeating today that the role we play in this place to secure future FDI in growth in strategically important sectors is somewhat akin to that of a cricket groundsman. As I see it, we are the groundsmen and women whose job it is to prepare the wicket for our batsmen to thrive. Cricket fans will recall how England’s batsmen felt the wrong end of a rough wicket at the hands of Indian groundsmen recently; the groundsmen prepared their wickets to suit their bowlers and make life harder for our batsmen. In much the same way, it will be the job of England’s groundsmen to prepare our wickets to suit our own batsmen, not their bowlers, during the return fixture. That is the home advantage principle, which we should be applying in this place too. It is our job to set up advantages for our businesses, communities and regions by preparing a wicket to suit our ambitions. Admittedly, we are on quite a sticky wicket at the moment, but with every rough patch that emerges, there is an opportunity for the most creative of spinners to take advantage of the new landscape.

That is what I believe the purpose of this office should be, and indeed is, and I read with great interest the initiatives that are being rolled out by the Office for Investment to that end. The foreign investment summit will, I believe, be the largest gathering of investors to meet in the UK ever. Its focus on clean technologies is a clear signal that the Government understand where their attention should be focused in order to capitalise on the biggest future growth opportunities.

When I worked in corporate and international banking, my role was to engage senior investors with high value opportunities, so I understand how important a statement this summit makes in telling the world that the UK is open for business and in nurturing and developing strategically important relationships. We cannot overestimate the huge dogfight for FDI currently taking place across the world. Global competition for FDI has never been fiercer as countries try to recover from covid-19. It is for this reason that I believe now is the time to prepare our wicket effectively, to make sure that the UK is on top of its game. The Office for Investment and set pieces such as the foreign investment summit can be a central plank of that ambition. With that in mind, would the Minister expand on the single front door strategy, and explain how the Office for Investment will be given the prominence and capacity it needs to lead this work and navigate the UK through the currently incredibly competitive climate?

I welcome the establishment of the office and what it says to the world about the UK’s priorities for the future. We are a country that is open for business on a global scale and inviting of others to add value to that endeavour. Given the title the Office for Investment, I wonder whether we might even be practical and prudent to extend or replicate the UK’s domestic investment centre. So much wealth is already under management in the UK: nearly £10 trillion worth of assets. To challenge the US as the best place to grow new innovation and technology, we need to encourage more FDI, but we also need to encourage more domestic investment at an earlier stage to catalyse growth.

A relatively small proportion of the £10 trillion-worth of assets under management in the UK is ever directed at UK venture, and yet we still have one of the world’s largest venture markets: $13.2 billion was invested in UK venture in 2019, making it the fourth-largest market in the world by inward investment. Imagine, though, how much potential could be catalysed if we were to channel a larger portion of assets under management into venture. A domestic version of this office, to include examining changes to the domestic regulatory landscape, could encourage a greater flow of capital into UK-backed venture. Various Government-led initiatives could be considered that encouraged or even obliged the biggest investors in the UK, such as institutional pension funds, to include venture as an asset class in all they do. That might fall outside the Minister’s current purview at the Department for International Trade, but I would be interested in his thoughts on the potential of a dual approach, to look at foreign and domestic investment.

This is a very positive step forward for the UK’s FDI strategy. It will provide clear leadership in Government and a clear and obvious door for foreign investors to go through. The office has my full support and I look forward with great optimism to the foreign investment summit, which I believe will help to position the UK as the natural choice for foreign investors.

[Ian Paisley (in the Chair)]

The rules state that with the permission of the Member opening the debate and the Minister, a Member may make a short speech, so I call Marco Longhi.

Trade Bill

Julie Marson Excerpts

Consideration of Lords amendments & Ping Pong & Ping Pong: House of Commons
Tuesday 19th January 2021 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

I rise to speak in favour of the amendments tabled in the names of the noble Lords Alton and Collins, the driving purpose of which is to root our foreign and trade policies in the values and principles that our country and our constituents hold dear.

According to the British Foreign Policy Group’s polling, more than eight in 10 of the UK public believe that the UK should sometimes or always lead the way on global issues, while across this House we know that if global Britain is to mean anything, our country must have the moral authority to lead by example. That authority will be fatally undermined if we end up sacrificing our ethics and values on the altar of tawdry trade deals with genocidal states.

The term “genocide” evokes harrowing memories of Bosnia, Rwanda, Cambodia and, of course, the holocaust. If ever there is a time for Britain to show global leadership and stand up for our values, it is at the very moment when we witness those early, chilling signs of genocide. On that note, the nation was collectively aghast when we saw Andrew Marr show the Chinese ambassador a video of shaven-headed Uyghur Muslims being forcibly loaded on to trains, the video accompanied by moving accounts of women being sterilised and the horrors of forced labour camps. The Jewish community knows all too well that comparisons with the holocaust should be used sparingly, so when the President of the Board of Deputies of British Jews writes to the Prime Minister to draw parallels between events in Xinjiang and Nazi Germany and then calls for the Prime Minister to support the Alton amendment, the Government must surely take note.

I turn now to the profoundly misleading and disingenuous arguments that the Government are deploying against the Alton amendment. First, the Foreign Secretary claims that the amendment is unconstitutional because it would allow the High Court to frustrate trade agreements. That is nonsense, as it has been the settled policy of UK Government for decades that judges, not politicians, rule on genocide; so the Alton amendment is entirely consistent with that principle. The only difference is that we would be empowering, through that amendment, our esteemed British judges to make such a ruling, rather than the judges in an international court.

Secondly, the Foreign Secretary claims that the evidentiary bar for genocide is simply too high, and that the Government would set their own threshold far lower, by which to determine whether the UK would be entering into trade deals. Well, fine—then the Government should cease their attempts to defeat the amendment, as the amendment should surely be seen as purely an insurance policy against future backsliding. Moreover, if it is indeed the case that the Government are seeking to adopt an even more progressive approach, then Conservative MPs should also be supporting the Collins amendment, which rightly sets out why the UK Government should apply a human rights assessment to all negotiations.

Thirdly, the Foreign Secretary argues that the amendment would give rise to vexatious claims—again, disingenuous nonsense. The High Court has a well-established process for filtering vexatious claims out of its system. For far too long, the international community has allowed authoritarian regimes to hold the international human rights legal order hostage. Russia and China wield their vetoes cynically and ruthlessly, and that is why the UK Government have never succeeded in recognising a genocide while it is ongoing since the Nuremberg trials, 75 years ago.

If this House votes with the courage of its convictions tonight, we will be grasping the opportunity to lead the world in standing up to those regimes and breaking the stranglehold that they currently have on our system. Let us show some global leadership. Let us back Alton and Collins this evening. Let us send a message to the world about the type of country we really are.

[Julie Marson (Hertford and Stortford) (Con) [V]]

I believe this is a good Bill, which we should pass in its current form, but I want to address the amendments raised most frequently by my constituents—Lords amendments 1 to 3.

I have confidence in the robustness of our system of scrutiny. We have been absolutely clear that in all our negotiations we will not compromise on our high environmental protection, animal welfare and food standards, and every Government announcement has been entirely consistent on that. The Food Standards Agency maintains rigorous standards. The European Union (Withdrawal) Act 2018 transfers existing EU import requirements on to the UK statute book. We have the power of Parliament, where MPs will be able to scrutinise and effectively veto future trade deals under the CRaG procedure, and we have the Trade and Agriculture Commission, with newly extended powers putting it on a statutory footing.

Secondly, I am, of course, appalled by the reports from Xinjiang, but the amendment on genocide will do nothing to help the Uyghur people. I simply say that the UK has a long and proud history of extending and protecting human rights, and promoting our values abroad. A well-intentioned amendment to bring human rights within the scope of this Bill would seriously compromise the separation of powers. I do not want to see judicial intervention in legitimate trade and foreign policy, particularly in the context of our existing checks and balances. I believe in this Parliament, and in its duty and commitment to determine appropriate sanctions and in what circumstances we conduct trade negotiations.

Most vital is what the Bill enables in its current form. It provides a fantastic platform for growth. It is my firm belief that to realise the potential of global Britain, we need to recognise the role of this place in that endeavour. We do not create growth, but we can enable it. Throughout the pandemic, we have relied on frontline heroes—our doctors, nurses, care workers, police and shop workers, to get us through—but in the next stage of recovery it will be the wealth creators, business people and entrepreneurs who will take us forward, leading our recovery into long-term prosperity. What they need is a dynamic and investable playing field open to them. To think differently, innovate and grow, we need the freedom to trade.

This Bill has the power to transform Britain’s economy by going further and faster in the sectors of the future. It will not be establishment banks and oil companies dominating the FTSE 100 in 20 years’ time, but it will be the innovation sector, digital, data and artificial intelligence that creates the most new wealth, and we can enable Britain now to become the global hub for growth sectors for the future. I will not be supporting today’s amendments, because I am truly confident in the levels of scrutiny that exist and I am confident that this Parliament and Britain’s moral compass do not rely on judicial intervention. Most of all, I believe in the global Britain that this Bill represents and realises.

[Mary Kelly Foy (City of Durham) (Lab) [V]]

Whenever this Bill comes before this House my inbox is the same, as I suspect every Member’s is; once again, constituents have emailed en masse to express their support for many of the amendments being debated today. From this correspondence, it is clear that my constituents do not want to compromise on standards; that they fear for the future of the NHS under any US trade deal; and that they want more scrutiny, not less. However, what is clear more than anything else is that they do not trust this Government. Although the Government have said that our farmers will not be undercut, that the NHS is safe and that human rights are non-negotiable, my constituents simply do not believe them. There is a very simple reason for that: although the Government are happy to make promises, they will not commit them to law. People have suffered too many U-turns, too many failures and too many excuses from this Government to believe them any longer. My constituents want legal guarantees, not empty ones.

The incredible thing is that these Lords amendments cover issues on which the vast majority of this House would claim to agree, yet the Government will today vote down a series of vital protections. Who can argue that a trade deal with a state such as Egypt, whose Government jail and execute religious minorities and human rights activists, should not contain iron-clad human rights clauses? If we are to be a country that promotes and defends human rights, we should make a stand and not do business with those who seek to destroy those protections. A faction in government is proud of its record and would welcome scrutiny, yet not surprisingly this Government want to hide from it. It is time that this Government recognised that MPs are paid to debate important issues, make decisions and represent our constituents. Why are they so afraid to do so?

Finally, there is the issue of standards. Whether it is food standards, environmental standards or labour standards, people are worried. These standards have been fought for in this country and the EU, and we do not want them undermined or undercut. It would be devastating for our farmers and damaging to already struggling businesses.