The North is outperforming the rest of the country when it comes to attracting foreign direct investment, a new report says.
Analysis released by the Northern Powerhouse Partnership suggests foreign direct investment into the North has gone up 72% in the last five years despite dropping across the rest of the UK. Overseas investment into the North rose from $25.4bn between 2012-16 to $43.7bn between 2017-21, helping to create more than 60,000 jobs.
By contrast, foreign investment into Greater London dropped 14% over the same time period and fell 16% in the rest of England. The report’s authors say that moves by former Chancellor George Osborne - who chairs the Northern Powerhouse Partnership - to heavily market the North on overseas trade missions paid dividends.
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By contrast, the Government’s commitment to its ‘levelling up’ agenda has come into question in recent weeks, with last week’s ‘mini Budget’ seeing Chancellor Kwasi Kwarteng saying that he wanted to grow the overall UK’s economy rather than have a “a fight over redistribution” to poorer parts of the country like the East. His fiscal statement has widely been judged to be beneficial for London and the South East rather than the North.
Lord Jim O’Neill, vice-chair of the Northern Powerhouse Partnership and a former Treasury Minister, said: “The mission to put the Northern Powerhouse on the world map has been a resounding success and a huge amount of credit should go to the genuine cross-party effort between central Government and Northern civic leaders to make this happen.
“We have been particularly successful in Asia – while the rest the UK has seen FDI from Asia plummet $28bn, 56%, over the last five years, it’s gone up 7% in the North. I often felt that the Northern Powerhouse concept was better understood by investors in Asia than it was among politicians and financiers in London. This is proof of the North’s economic potential, especially in innovative and green industries. If the rest of the world sees it, then our own Government should be putting us front and centre of their growth strategy.”
Shadow Business Secretary Jonathan Reynolds, who grew up in Sunderland, said: “There are fantastic industries and opportunities across the North of England but the Government are failing to make the most of the successful innovation that is happening here. This report is great news, but we must build on this success with long term consistent plans that businesses can invest alongside. Labour’s Industrial Strategy will support investment, innovation and offer the certainty northern business needs to prosper.”
The report found that Greater Manchester has performed consistently well in attracting foreign investment, with the North East and South Yorkshire seeing significant upsurges in recent years. Sectors of the economy that have fared particularly well in attracting investment include renewable energy, chemicals, biotechnology and electronic components. North East projects singled out in the report include American internet security firm Arctic Wolf’s decision to set up its European headquarters in Newcastle and JDR Cables’ plans for a new at Blyth, Northumberland.
Earlier this year, figures from the Department for International Trade showed the North East had beaten all other UK regions in creating jobs from inward investment. A separate report also named Newcastle and Middlesbrough among some of the best places in Europe in which to invest.
Secretary of State for International Trade Kemi Badenoch said: “Trade creates jobs and helps grow our economy. In the last five years, overseas investment has created more than 50,000 jobs in the Northern Powerhouse. That is great news for communities across this thriving, innovative region.
“With our bold tax-cutting agenda, we’ll put more money back in the pockets of hard-working Brits, allow businesses to invest more of their profits, and boost our attractiveness to overseas investors.”
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