RUTH SUNDERLAND: UK must win race to invest

It's no secret, especially to Jeremy Hunt, that we need companies to invest more in Britain.

Thoughts within the government were focused on this by some candid comments from Pascal Soriot, the boss of drugs giant AstraZeneca, about his decision to set up a new factory in Ireland rather than Britain.

Soriot has been basking in corporate superstar status since he rejected a cynically hostile takeover bid from US Pfizer almost a decade ago. Had he taken the greedy way out, Britain would have lost a flagship and the world would likely have been deprived of a Covid vaccine.

So when Soriot said that Britain's hopes of becoming a life sciences superpower are being damaged by our tax system, Hunt would have been terribly stung.

The Chancellor has identified the life sciences as an area in which he believes Britain can excel, along with green industries, digital technology, the creative sector and advanced manufacturing.

Hence the mountain of rhetoric in the Autumn Statement about supporting business, peppered with claims that its 'full cost' measure is equivalent to an £11 billion tax break, plus the boast that Britain has the lowest corporate tax in the G7 .

That's true, but Ireland is not in the G7. It's just a short step further, with a corporate tax rate of 12.5 percent, compared with 25 percent in Britain after an increase that Hunt failed to reverse.

But he at least supported an inquiry by Tory peer Lord Harrington into attracting more foreign investment. Harrington's most striking proposal is a concierge service, providing potential foreign investors with a Jeeves-like fixer who can guide them through the tangle of subsidies, planning regulations and the like.

One possible difficulty is finding the fixatives in the first place. Previous attempts to hire recently retired senior civil servants have apparently clashed with Whitehall's attempts to reduce the use of external 'consultants', which sounds like vintage Sir Humphrey.

The real test is whether the government and civil service will do everything they can to make all this happen. Britain is actually in a good position in terms of foreign direct investment, with the highest level in Europe and an inflow of almost £80 billion last year.

But business investment in general, including that of British companies, is persistently lower than that of our peers. We rely on foreigners to fill the gap. We cannot rest on our laurels. Not when Joe Biden is touting his ridiculously named Inflation Reduction Act, which provides up to $2 trillion in subsidies to companies around the world. In the race for investments, there are no prizes for second place.

The way to respond is not by trying to pick winners or shower wealthy foreign companies with taxpayer-funded subsidies for investments they could have made anyway. Britain is good at attracting foreign buyers, but not so smart at rooting out the predators who only pretend to be investors and are actually looking to grab cheap assets.

There are real long-term foreign investors out there, such as Nissan, which has just announced a £2 billion plan to build three electric cars in Sunderland.

Many in my native North East would not appreciate me saying this, but this is the fruit of Mrs Thatcher's determined drive in the 1980s to attract Japanese car manufacturers.

In the same vein, there should be 'target lists' of foreign companies that we can pursue in each of the Chancellor's five growth areas.

The old idea of ​​leaving everything to the free market, sometimes associated with Thatcherism, will not work.

Maggie herself could not have been a more energetic saleswoman for Britain.