UK to safeguard foreign investors’ interest, says PM.

 LONDON: The UK government assured foreign investors that the proposed caps on immigration for economic migrants will not hurt companies seeking to do business in the country, and any changes to the takeover laws will not single out foreign investors. “The policy will be managed to make sure that foreign investors interests are not harmed,” said secretary of state Vince Cable, at an event announcing UK’s national FDI figures.

“The new government was expected to demonstrate that it was managing immigration. We are aware that foreign investors need to bring in high level managers, skills, and have intra-company transfers,” in a first such assurance that overseas investors are not hit by immigration caps. He also clarified that while the independent takeover panel is in the process of reviewing UK’s takeover laws, which were “too permissive in the past, the changes will not be enormous, and it will affect both domestic and foreign companies in the same way.”

The new government has committed to cut non-EU economic migration to ‘thousands,’ but a mechanism to implement this policy has yet to be worked out. UK’s takeover laws are currently being tightened, after widespread criticism of the Kraft-Cadbury takeover, which resulted in massive job losses in the UK.

At a breakfast meeting with over 100 top UK foreign investors, including the Tata group, David Cameron, prime minister, reiterated that the new government has put UK’s ability to attract and retain inward investment at the heart of its economic recovery plans. Mr Cameron, Mr Cable, and some other key cabinet ministers are due to visit India later this month in a massive show of political will to improve UK–India relations by the new government.

On the day when national unemployment figures dropped to a 4-month low, UK Trade and Investment, the UK’s trade body, announced that in 2009-10, jobs created by foreign investors in UK rose 20% to 94,000, despite a fall in the number of projects, to 1619. India, which was the second-highest inbound investor country in 2009-10, dropped to the 4th place, creating 5,889 jobs, down from nearly 8,000 for 2009-10, while Japan regained its position as the biggest inward investor from Asia. “It’s a temporary hiccup,” Mr Cable said. M&A deals have almost halved in the past year, and no big-ticket acquisitions like Tata-JLR has contributed to the drop. UK’s national investment figures do not estimate the total value of FDI, and use the number of projects and jobs created. The US remains the largest inbound investor, followed by Japan, France, India, Germany and China.


Source : Economics Times