Government response to Trade Committee investment policy report “less than encouraging”

The International Trade Committee today publishes the Government’s response to its inquiry examining UK investment policy.

The Committee’s report, published in July, examined the Government’s performance in supporting inward and outward investment and its planned approach to negotiating post-Brexit agreements to liberalise and protect foreign investment. It urged publication of the Government’s investment strategy and criticised its failure to “set out even basic lines of policy” on post-Brexit UK International Investment Agreements.

In its response, the Government agrees with the Committee’s assessment that the statistics currently used to assess trends in investment levels are inadequate and commits to working with the Office for National Statistics (ONS) to address shortcomings. 

However, the Committee’s call for the Government to publish its overarching investment strategy is rejected “because of the likelihood of a competitive response such as the generation of counter-narratives.” Regarding the development of policy for future investment agreements, the Government says “a wide range of options” will be considered when setting priorities – but offers little in the way of detail.

The response simply ignores a call by the Committee for the Government to outline how it will implement a manifesto promise to tackle inward investment that is “driven by aggressive asset-stripping or tax avoidance”.

Commenting on the Government’s response, Committee Chair Angus Brendan MacNeil MP said:

“The UK is both a leading source of, and destination for, international investment. Brexit could have a major impact on this – and the UK will once again be negotiating International Investment Agreements on its own behalf. Against this background, it’s vital to have transparency and openness from the Government about both its investment strategy and its policy in relation to International Investment Agreements.

“The response to our report by the Department for International Trade is less than encouraging. Some of our recommendations are not fully addressed, and one – regarding what the Government is doing to address investment ‘driven by aggressive asset-stripping or tax avoidance’ – is completely ignored. I am not filled with confidence that the Government is in good position to start negotiating on international investment – either as part of free trade deals or in standalone investment agreements – in a matter of weeks.”