The UK has become increasingly less attractive to foreign firms, resulting in a loss of investment in UK businesses, warns the CBI in a statement circulated this week. It has also issued a list of recommendations, calling on the government to ‘completely transform the investment landscape’.
Foreign investment in the UK economy fell from £186.4bn in 2007 to £45.7bn in 2009, due to ‘stumbling blocks’ dissuading international companies from setting up over here, says CBI Director-General John Cridland.
The commercial property sector was surprised last October by a CBI/Deloitte survey, which stated that 8–12% of companies did not have the foresight to plan where their primary headquarters would be in five years time. This is probably endemic to the ‘batten down the hatches’ attitude of many corporations during an economic downturn, but is one that has had a distinct effect on the commercial property market.
To boost the commercial property market, the CBI recommends that fast-track planning procedures should be put in place, the transition to a low carbon economy accelerated, and broadband speeds improved.
The time it takes the planning system to arrive at decisions is also highlighted in the survey, with reference to the government’s localism agenda of devolving more power to local councils.
The commercial property sector will be particularly interested to hear the call for greater resilience and investment in infrastructure, internet bandwidth and the transport network, where ‘rigorous analysis’ is requested. These measures, say the CBI, will stimulate new market activity and establish a ‘fit for purpose infrastructure’.
Tax receives a comprehensive analysis. There are recommendations to eventually reduce corporation tax to 18% instead of the phased 23%. Included is a plea to review business rates, fuel duty, and low carbon taxes to foment competitiveness and encourage investors to access UK commercial property.
As the commercial property sector incorporates sustainability regulations, evidence of long-term government commitment to maintaining these regulations is appealed for, underlined by Siemens CEO Andreas Goss’s observation that ‘Our investment decisions are taken with a long-term view, so stability of government commitment is important’.
The CBI interviewed 400 UK companies, including several senior business leaders, as part of the research.
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