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Council of Foreign Chamber of Commerce

Gareth Thomas MP,  Former Minister for Trade, Development and Consumer Affairs (jointly with DFID)
London,  06 November 2008

Good evening.

In the current climate it would be easy to be pessimistic and gloomy about our prospects here in the UK. But, personally, I relish the opportunity to champion the imagination, dynamism and talents in British businesses. And let me be clear, we are determined as a government to keep the UK top choice for businesses wanting to invest in Europe.

There are many reasons to be confident about the UK, it will be tough, but our economy is better placed to weather this economic storm than it ever was in the past.

Our advantage lies in our strong traditions in international trade and our openness to the world.

We have more global reach as a country than any other, we will continue to reject protectionist responses: our view remains that the way forward is to maintain, indeed extend, our tradition of openness.

That is one reason why we continue to push forward from the Prime Minister down for the current round of world trade talks to be completed. We made much more progress in July in Geneva then the headlines at the time suggested and I am hopeful that the will there for a deal to be done.

As part of my ministerial duties, I have responsibility for UK Trade & Investment, UKTI, the UK government organisation that supports UK business to succeed internationally.

Part of UKTI’s work will continue to be to help overseas companies to grow their business globally from a UK base.

UK inward investment results for 2007 highlighted our continued success in attracting foreign direct investment, with a record 1,573 projects, won, a fifth consecutive year of growth.

That investment was from 48 different markets around the world with international investors pointing to Britain’s compelling mix of an open and highly internationalised economy, business-friendly environment, a strong research and development base and a stable and highly respected regulatory system.

We increased the level of new investment secured from Japan, Sweden and Australia; all important markets for research and development investment, highlighting how the UK is seen as an attractive base for expansion within Europe.

Closer to home, investment from Ireland, Germany and the Netherlands demonstrates that the UK economy still represents a key opportunity for our European neighbours as well.

I want to continue to encourage international business to see the UK not just as an investment location in itself, but also as a springboard for global growth, helping companies access global markets.

And UKTI’s specialist programmes such as the Research and Development Programme, Global Entrepreneurs Programme, High Growth Market Programme and the UK Advisory Network for Inward Investors, all collectively support that objective.

I understand that our host Nick Stephens and HSBC are leading members of the UK Advisory Network for Inward Investors. We want to strengthen still further the partnership between Government and the private sector in support of new and existing investors.

Our, UKTI’s Research and Development Programme created in 2006, has resulted in a significant increase in the number of research and development projects based in the UK, including Swedish Telecoms company Ericsson, who established a new research and development facility in Coventry employing 650 highly skilled workers.

UKTI’s High Growth Market Programme helps UK based mid corporate companies to grow their operations within 17 key high growth target markets, either as new entrants to these markets or as those looking to expand.

Indeed High growth markets have become an important source of inward investment, in particular China and India.

As part of the Global Entrepreneurs Programme UKTI has recruited entrepreneurs to target and incubate technology companies of exceptional potential, with the aim of creating global technology companies headquartered in the UK.

We have delivered over 100 successes through this programme since 2004.

Helping SMEs into overseas markets is particularly important during the economic downturn. I am very pleased to announce that from next April UKTI will double the grant limit for companies wishing to exhibit at overseas trade fairs. Under the Tradeshow Access Programme an SME will be able to apply for grants at up to six shows around the world. We have listened to business and we know how valued this support is for success overseas.

To help champion British business abroad and Britain as a good investment location the Prime Minister recently announced the creation of the Business Ambassador Network.

These are senior figures from business and academia who will work with us to promote the UK’s excellence internationally.

In particular, they will draw on their experience of business to help small and medium-sized enterprises who sometimes face greater barriers to accessing global markets than larger businesses.

To those of you who are also long standing investors in the country let me reassure you: Existing investors are equally important to us and we want to continue to work closely with them to provide support if needed beyond their initial investment into the UK.

UKTI has, for example, maintained close working relationships with both UCB of Brussels and Pfizer and we are pleased to see that they have chosen the UK as the location of choice to form Cyclofluidic, a collaboration established to accelerate the drug discovery process.

Whilst we have some lessons to learn I have no doubt that Britain and the City of London in particular will continue to host a very strong financial services community.

As a London Member of Parliament I know just how important the City is for London’s economy, for the UK’s economy and increasingly for the wider European Economy.

46% of foreign equity trading takes place in London, it is at the forefront of developing new markets.

We lead the way in carbon finance and London is the largest Islamic finance centre outside of the Gulf.

The long term outlook for the City’s position as the world’s leading international financial centre remains secure as it continues to benefit from our openness and flexibility.

The UK is not dependant on any one sector for Foreign Direct Investment, there is scope for growth in a number of sectors such as creative industries and advanced engineering.

Indeed with Lewis Hamilton, Britain’s recently crowned Formula One World champion driving for one of the six, out of ten, Formula One teams based in the UK shows our potential for further growth in advanced engineering businesses.

The recently released United Nations Conference on Trade and Development’s World Investment Report ranked the UK as the most successful country in Europe at attracting inward investment, with record figures of over one trillion US dollars, placing us second globally only to the USA.

Significantly, these figures include the first six months of the global credit crunch and represent the second consecutive year that the UK has exceeded a trillion dollars.

Over the coming months we are facing some significant challenges which should be met head on.

I believe we will come through those challenges stronger, and I am looking forward, as do my staff in UKTI to working closely with you all to that end.

To achieve this, cooperation between countries will be key to our collective success.