MP for Windsor
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Windsor MP asks Government question on investment

On Tuesday 28th February Adam asked Chancellor of the Exchequer for an update on the work that they are doing to make Britain a better place for private sector firms to invest:

Treasury Questions – Tuesday 28th February

Adam Afriyie (Windsor, Conservative): I very much welcome this Government’s healthy commitment to scientific spending over several years, but it seems that our business investment in research is below the OECD average. May I urge the Chancellor to examine measures that will increase private company business expenditure on research?

David Gauke (Chief Secretary to the Treasury): As the Chancellor announced at the autumn statement, the Government are significantly increasing investment in research and development, rising to an extra £2 billion a year by 2020-21. We have also made the R&D tax credit regime much more generous. We want to ensure that the UK remains an attractive place for business to invest in innovative research.

Windsor MP asks questions on space policy in Parliament

On Tuesday 13th December Adam asked the Business, Energy and Industrial Strategy Department for an update on the progress at the recent European Space Agency (ESA) summit (4:53 to 6:21):

 

Business, Energy and Industrial Strategy Questions, 13th December:

Adam Afriyie (Windsor, Conservative): What steps his Department is taking to promote science and innovation.

Jo Johnson (Minister of State for Universities, Science, Research and Innovation): This Government are strongly committed to science and innovation. We protected the science budget at the spending review in 2015. In the last autumn statement, a few days ago, we committed to spending a further £2 billion a year by 2020/21. The creation of UK Research and Innovation, through the passage of the Higher Education and Research Bill, will increase the value and impact of our investments in science and innovation in the years ahead. [Official Report, 16 December 2016, Vol. 618, c. 7-8MC.]

 

Adam Afriyie (Windsor, Conservative): I thank the Minister for that answer. It has certainly been a good time for science and innovation in Britain. It has also been a good year for the UK space sector, with Major Tim Peake’s historic visit to the international space station and a new spaceport here in the UK. It certainly strikes me that the next big challenge will be the successful delivery of the ExoMars programme, particularly given some of the rumours that have been going around. Will the Minister update the House on any progress made at the European Space Agency summit recently?

Jo Johnson (Minister of State for Universities, Science, Research and Innovation): Yes, I am happy to provide a brief update. My hon. Friend is an aficionado of space policy and former chair of the parliamentary space committee, so he will be delighted to know that we had an excellent outcome at the European Space Agency’s Council of Ministers. We committed a further €1.44 billion, which has secured the future of the ExoMars programme, among many other things.

 

The MP for the Windsor constituency, Adam Afriyie, said:

“As a former Chair of the Parliamentary Space Committee, I am delighted that the Government continues to invest in making the UK a world leader in the space industry.

“Space has the ability to inspire like few other areas. 2016 was a great year for the British space sector and has undoubtedly motivated many students to pursue their career, and dreams, in researching this area. I hope that 2017 will be even better.

“I am proud at the fact that Britain has a long and prestigious history of being at the cutting edge of technological innovation. We have some of the most prestigious universities, innovative technology companies and supportive regulatory environments in the world.

“This Government has made strong steps to creating the right ecosystem for the space industry to deepen its roots and grow. I hope that they continue the good work investing and nurturing technologies for the future.”

 

 

ENDS

  1. Adam Afriyie is the Prime Minister’s Trade Envoy to Ghana.
  2. He has a strong background in science, technology and innovation.
  3. He is currently Chairman of the Fintech APPG, Parliamentary Office of Science and Technology (POST) and President of the Conservative Technology Forum (CTF).
  4. He was shadow Minister for Science from 2007-2010 and has a background in the information services and technology sector.
  5. He is Patron of the Parliamentary Space Committee (PSC) and was Chair of the PSC between 2010 and 2015.
  6. The POSTnote on ‘UK Commercial Space Activities’ can be found here.

 

Attracting foreign investment

Adam Afriyie (Windsor, Conservative): To ask the Chancellor of the Exchequer, what steps he has taken to encourage more foreign direct investment in UK companies.

Andrea Leadsom (Economic Secretary to the Treasury): In 2013-14 the UK attracted 1,773 foreign direct investment projects, giving a total stock of £1.6 trillion of such investments – more than any other country apart from the USA. During this Parliament the Government has taken action to make the UK a more attractive location to run a business including reducing corporation tax so that it will reach 20% next year – the lowest in the G20 – and investing in skills, science and infrastructure. The Government has also increased resources at UK Trade and Investment including for example establishing private sector-led teams in the Gulf, Central Europe, and South America dedicated to attracting inward investment into the UK.

 

Foreign investment in the UK

Adam Afriyie: To ask the Chancellor of the Exchequer what estimate he has made of the amount of foreign direct investment generated since 2010 as a direct result of the lower rate of corporation tax.

David Gauke (The Financial Secretary to the Treasury): Since 2010, the Government has cut the main rate of corporation tax from 28% to 21%. It will fall further next year, to 20%, giving the UK the joint lowest rate of corporation tax in the G20. The Small Profits Rate has also been cut to 20%.

These cuts are a central part of the Government’s long-term economic plan. They are intended to make the UK more competitive, supporting business investment and job creation.

Government modeling suggests that the corporation tax cuts introduced in this parliament will:

increase business investment by between 2.5% and 4.5% (£3.6bn to £6bn in today’s prices) in the long term

increase GDP by between 0.6% and 0.8% (£9.6bn to £12.2bn in today’s prices) in the long term

Foreign direct investment decisions are influenced by a range of factors including skills, market access, and infrastructure. Consequently, it is difficult to isolate the exact impact of the corporation tax cuts from reform in other areas. But recently published data on inward investment has been very encouraging.

In their 2013/2014 Inward Investment Report, UKTI said ONS data showed the value of FDI stock increased from £725.6 billion in 2010, to £936.5 billion in 2012.

UKTI also reported that the UK attracted more inward investment projects last year than in any year since records began in the 1980s. UKTI recorded 1,773 projects, creating 66,390 new jobs.

This is supported by analysis from Ernst and Young, who use their own independent database to assess inward investment. Ernst and Young’s Annual Attractiveness Survey, published in June, showed the number of inward investment projects in the UK had risen by 15% in the past year, against the background of a European market that grew by just 4%.

As noted above, it is difficult to isolate the impact of tax policy on these trends, and UKTI does not have estimates of how much of the new investment has been a direct result of the lower rate of corporation tax. But it is clear that the corporation tax reforms have changed perceptions of the UK competitiveness. For the past two years, the UK has ranked highest in the KPMG survey on international tax competitiveness, ahead of countries including the US, the Netherlands and Switzerland.

 

Britain needs to encourage investors to come to the UK

It would be better if more foreign money was invested in British companies to create jobs and pay taxes rather than simply funding Government borrowing. The answer to a recent parliamentary question highlights the need for a change if overseas money is to help boost jobs and economic growth.

In a column written for the Huffington Post, I argue that the Government needs to strengthen the investor visa in three ways to encourage more investment in UK private companies.

Read the article on the Huffington Post.