My Lords, I am delighted to take part in this debate and congratulate my noble friend Lord Harrington on his excellent review. I draw your Lordships’ attention to my register of interests, which discloses that I am a senior partner of Cavendish Corporate Finance. As such, I have had a 35-year career in attracting investors into UK businesses, mainly from overseas buyers, and thus have some experience in this area. I have very little experience on the greenfield side of FDI, as we typically act for mature businesses. I note that this report is, quite rightly, very heavily focused on greenfield.

It is worth noting that academic research suggests that just 4% of local business units in the UK are foreign-owned but that they account for nearly 40% of UK turnover. Some research by Jonathan Haskel, the son of the noble Lord, Lord Haskel, shows that foreign-owned companies which invest in the UK are about 50% more productive than domestically owned ones, not least due to the knowledge spillover, so this really is important.

Despite all the talking down by some, FDI has remained very strong in the UK post-Brexit. No less a person than Warren Buffett told the FT in 2019 that he was

“ready to buy something in the UK tomorrow”— a marvellous endorsement. We take 17.3% of Europe’s FDI investments into the UK and are only second in Europe at so doing. To my surprise, the official figures record only 985 FDIs in the UK in 2023, which is very low. It amounts to £83 billion into our current stock of £2 trillion. Only 985 implies that not all the figures are properly recorded. It also misses a huge swathe of inward investment, which is private equity.

We should not forget that, according to a recent BVCA report, private equity and venture capital investment by UK firms in 2023 for global investment raised some £60 billion, of which £20 billion went into the UK alone. Of that £20 billion, over 80% comes from outside the UK; so that is overseas investors—largely American but not exclusively—coming in through private equity straight to UK businesses. This is, if you like, foreign indirect investment, but, none the less, it makes a massive difference to the UK economy.

The review has some excellent ideas on how we can do better. I will focus on recommendation 4.6, on a long-term approach to tax. The Government have been exceptionally helpful to UK businesses through the tax system, with R&D credits of some £6 billion a year and the expensing of capital allowances, but it would be very helpful if the Minister could pass the message to the Treasury that we need certainty on the availability of both capital expensing and R&D credits for overseas investors.

If the new Government are serious about growth, pushing the wealth creators out of the UK is not the way to do it. The lead item in Saturday’s Times shows that they are leaving in droves, frightened by the proposals on non-dom tax; the previous Chancellor’s proposals were quite modest in comparison. There is also the disastrous proposed rise in capital gains tax. Why would anyone who is footloose want to stay in the UK? These actions completely contradict the stated objective of growth. If businesspeople do not want to live in the UK, or will not live in the UK, how on earth do we expect them to invest in the UK? It would be tragic if these excellent ideas from the noble Lord, Lord Harrington, are wasted because people such as non-doms and investors are encouraged almost to leave the country by these tax proposals.

I know that the noble Baroness, Lady O’Grady, will not agree with me, but I must add that overseas investors and, in particular, US investors, who are typically the most significant, are aghast at the proposed employment changes. They have invested in the UK way ahead of European countries because they see the current flexibility in employment legislation that facilitates employing people. Can the Minister please confirm that an impact statement will be prepared, showing the likely impact of any proposed employment Laws on FDI and PE investment in the UK?