Britain at risk of becoming less attractive than France for international businesses

Britain is becoming a less attractive place to invest and risks falling behind France unless the Government becomes more business-friendly, an influential think tank has said.

The Center for Policy Studies interviewed over 100 business leaders and entrepreneurs and found the UK’s international standing was slipping as a result of red tape, rising taxes and ministerial complacency.

“They warned that the Government has yet to put forward the policies, or produce a narrative, that makes an irresistible case for Britain as a place to do business,” the group said.

It added: “The report urges the Prime Minister to lead from the front, in the way that Emmanuel Macron does in France, or he did during his time as Mayor of London, in making Britain the natural home for investors and investment.”

One interviewee told the CPS: “Visiting Macron is now the key pit stop everyone makes on the way to Davos – not going to London.”

Some of the world’s most powerful business leaders are set to meet in Davos this week for the annual meeting of the Word Economic Forum, amid rising cost-of-living pressures around the world.

Rishi Sunak, the Chancellor, is not attending, the Treasury confirmed last night, nor are any of the Treasury’s junior ministers.

Business leaders last week accused Boris Johnson of squandering the post-Brexit opportunity to slash red tape and taxes.

Sir Martin Sorrell, the advertising mogul, said at the time: “We have the highest tax rates I think for 70 years, and this is under a so-called Conservative Government.

“It’s much more Blairite probably than Tony Blair and Gordon Brown.”

On Sunday, Sir Martin added: “Post-Brexit we had the opportunity to go to what people called Singapore-on-steroids or Singapore-on-Thames and we didn’t really seize it.”

Howard Shore, chairman of Shore Capital, which supported the CPS report, said: “In post-Brexit Britain, it is essential that we re-establish our own economic identity and play to our many strengths as a nation to restore the entrepreneurial environment and enthusiasm that existed during the Thatcher government in the 1980s. “

The CPS was co-founded by Margaret Thatcher and remains highly influential among Conservative politicians. It said it interviewed more than 100 business figures controlling billions of pounds, in what it said was the largest focus group so far of major investors.

The report added: “There is a firm belief – in some quarters bordering on despair – that Britain is becoming a less attractive place to do business and that the Government is not focused enough on the problem.

“There is a general sense that it is still too hard for business to get a hearing [with the Government]… There is also a powerful sense – driven by the convulsions of the past few years – that Britain has become a less stable and predictable place to put your money. “

By contrast, the report said that France’s president “has been setting aside enormous amounts of time to woo both established firms and high-growth newcomers that might normally consider the UK their natural European home.”

The CPS warned that the planned increase in corporation tax to 25pc from April 2023 as well as National Insurance rise and super-deduction withdrawal will harm the UK’s international tax competitiveness.

Its survey also found a perceived “lack of urgency” around reforming regulation after Brexit and feeling that the Government was “deferring too much to regulators, which are seen as fundamentally risk averse.”

As well as canceling the corporation tax rise, the CPS recommends extending tax regimes that “bring wealth and talent” to Britain, and creating a new “competitiveness unit” in Downing Street.

A Government spokesman said: “The UK is reaping the rewards of our post-Brexit freedoms and attracting private investment from around the world thanks to our approach to innovation, competitive tax environment, lack of red tape and our skilled workforce.

“Big businesses like Airbus and Nissan have recognized these benefits, giving a huge vote of confidence to our economy by committing to invest in the UK.”

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