Foreign Direct Investment

Lord Fox Excerpts

Tuesday 10th March 2026 Lords Chamber

[Lord Stockwood (Lab)]

The reason I have come into government is to try to balance the need to grow our economy with making sure that our economy works for all sectors and parts of our country. Creating an economy that delivers for businesses and for working people requires some changes. To put these into perspective, total annual employment costs in the UK were £1.4 trillion in 2024, and the costs associated with the Act that the noble Lord mentioned are equivalent to an increase of less than 0.1% of that. Those reforms are not about burdening businesses for the sake of it; many employers already offer good terms and conditions that go well beyond what the law requires, and will consequently be less impacted by this package. The Act is designed simply to help level the playing field, so that responsible businesses and employers cannot be undercut.

[Lord Fox (LD)]

My Lords, the Minister is no doubt aware of recent research published by King’s Business School late last year which estimates that foreign direct investment is 12% to 18% lower than it would have been had the United Kingdom not left the European Union. Does the Minister agree with me that the best way to make his job to attract investment into this country easier is for us to eliminate from our economy many of the bad things that Brexit brought, as quickly as possible? We could start by negotiating a customs union.

[Lord Stockwood (Lab)]

Hold that thought.

In the seven months I have been doing this job, the UK has clearly been redefining its position in the world, post Brexit and Covid. I am proud to be part of a Government who are out there doing trade deals, whether with India, the Gulf states or the US—ours is its first deal globally. Undoubtedly, renewed engagement with our closest trading partner, which represents 41% of exports from the UK and high figures for our direct investment, is critical to our long-term success. I would not go as far as the noble Lord suggests, but I agree that we are now in a position to have constructive and equitable conversations with our European partners.