“It’s not like it is in Paris,” one City chief groaned from the sidelines of the Labour Party conference last week. The businessman wasn’t talking about Liverpool, the relentless rain or even the conference at all.
In fact, on his third day plodding along at an event that felt somewhat flat, his thoughts had turned to the next big bash in the Government calendar – Britain’s international investment summit.
Exacerbated by the lack of detail given to attendees two weeks before the event, as well as the clunky timing of it taking place right before the Budget, the finance executive started to make unflattering comparisons to France’s own set-piece investment summit.
“We don’t do things with the smoothness and elegance of the French,” he sighed, gazing at the chaotic scene before us as swarms of people clamber for chairs or coffee on morning three of the conference. A few hours later, Sir Keir Starmer accidentally called for the “return of the sausages” instead of Israeli hostages.
It’s clear that Britain needs some French lessons on how to ramp up foreign investment. According to EY, France was Europe’s most attractive destination for foreign direct investment in 2023, beating the UK for the fifth year running.
At the annual Choose France investor bash at Versailles earlier this year, a record $16bn (£12bn) in foreign investment pledges were made from the likes of Microsoft, Amazon, Pfizer and AstraZeneca, which will lead to around 10,000 new jobs.
“The Americans will compare what we do in the UK to Paris,“ the City source from the Labour conference warned. After all, according to an executive at a US bank, the Choose France initiative is considered a “model in how you organise these events”.
While the French gathering is seen as slick in some banking circles, they said the UK version could be considered “a bit scrappy and vague”. There have been complaints that some big-name Wall Street bosses “whose diaries are crackers” are being put off from flying in for the UK’s flagship event because they don’t have enough details.
There’s also frustration that the gathering is taking place before the Budget, so the UK’s big sell will take place under the shadow of a looming tax raid. Some are also wondering who the new investment minister will be.
Benjamin Wegg-Prosser, chief executive of political advisory at consultant group Global Counsel, is understood to have declined the position. As one boardroom veteran puts it: it’s a “bit awkward that they haven’t filled this post given the proximity to the investment summit”.
But Conservatives hoping to use any of these grumbles as ammunition at their party conference this week would be better off holding fire.
Foreign investors are still wary of the UK precisely because of them, cautious following a chaotic government that churned through nine business secretaries and seven chancellors in nine years. One City executive argues that big-money, foreign investors have been put off of the UK ever since Brexit and the appointment of Liz Truss into No 10.
The comparisons with France are not new.
In a damning 124-page report published a year ago, executives said they were fed up with chasing the UK’s revolving door of ministers and found it easier to do business in France because president Emmanuel Macron picked up the phone and rolled out the red carpet.
Lord Harrington, who was commissioned by Jeremy Hunt to lead the report, said investors found that the UK was “disorganised, risk-averse, siloed and inflexible,” with politicians shoving financial decisions to a “series of semi-arm’s length institutions”.
Many investors were desperate for a change in government and are hopeful that this could be the start of a new, more investor-friendly era. Despite the gripes around the investment summit, this Government has been working hard to get across the narrative that this is the start of a new chapter. This has been accompanied by a constant stream of Whitehall meetings with influential corporate figures.
As Sir Keir met US investors for breakfast in New York last week, US investment giant Blackstone announced a £10bn investment in a new data centre in Northumberland. Meanwhile, Chancellor Rachel Reeves is exploring a shake-up of the Financial Conduct Authority, the under-fire City watchdog, in a bid to turbocharge Britain’s growth.
Sir Keir intends to tell the world’s wealthy at the gathering next month that this country is now more politically stable than the likes of France, especially following Macron’s surprise snap election. Stability is key for investors but they need to take home a more inspiring message. All the warnings of tough decisions and a “painful” Budget have hit consumers’ assessment of the economy.
Labour has hung onto the failures of its predecessors too tightly. It’s been all doom and gloom and “look what the previous lot left us with”, but now it’s time to move on.
When Rishi Sunak held a private roundtable with business lobby groups earlier this month to shake-out concerns, sources say he was told there was a fear that the Government’s repeated “talking down of the economy” could deter foreign investment. “You can do that stuff in opposition – when you talk it down in government, it has a market impact,” a source said.
The world’s biggest investors are all ears, but patience is limited. The investment summit should set the stage for a new chapter. A lesson or two from France wouldn’t go amiss.
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