Low tax boosts investment and jobs in the UK

Tim Wallace
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INVESTMENT from overseas jumped in 2012, official figures showed today, with business groups praising the UK’s falling corporate tax rate for stimulating the flow of cash.

Foreign direct investment (FDI) produced 1,559 projects in 2012-13, UK Trade and Investment said, up 11 per cent on the year.

New jobs from the investment increased 12 per cent to 60,000, while the number safeguarded by investment broke the 120,000 mark.

And the inflow pushed up the stock of FDI 11.5 per cent to £867bn, equivalent to 54 per cent of GDP at the end of 2012. That exceeds the US at 25 per cent, Germany on 21 per cent and France’s 41 per cent.

“The UK has been punching above its weight in attracting overseas investment over the past year, suggesting reforms to improve the competitiveness of the tax system and our ability to capitalise on strengths such as the science base and flexible labour markets place the UK high up the rankings for investors around the world,” said Lee Hopley from manufacturers’ industry body EEF.

“It is important that in any reform of the tax system, we don’t make it less attractive for investors looking to locate their operations in the UK.”