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British Prime Minister Rishi Sunak. Picture: PETER NICHOLLS/REUTERS
British Prime Minister Rishi Sunak. Picture: PETER NICHOLLS/REUTERS

London — Prime Minister Rishi Sunak has chosen Hampton Court, a 16th-century palace renowned for its maze, to host a summit at which he will try to win back favour among investors who have been left disoriented by twists and turns in British policy.

As Britain looks to wrest its ranking as Europe’s top foreign direct investment (FDI) destination back from France, Sunak will need to reassure them next week of a guiding hand from the government and of no more policy dead ends.

Years of political churn — with five prime ministers and a nonstop ministerial carousel since the 2016 Brexit vote — have shaken Britain’s reputation for stability among investors.

Hoping to emulate a French event in the glittering Versailles palace in May at which President Emanuel Macron won €13bn ($14.2bn) of commitments, Sunak will urge his business audience to show similar faith in Britain. But they may take some persuading.

Britain has changed course on key policies including its rate of corporation tax, its net zero timetable, a major high-speed rail project and its offshore and onshore wind policies.

Some executives say the country, long a magnet for FDI, has simply taken them for granted. Others told an official review that they struggled to navigate the country's “slow and cumbersome” system.

“The UK has diminished in its ability to attract capital in a variety of sectors,” said Jack Paris, the head of InfraRed Capital Partners, which manages $14bn of equity in infrastructure assets across 18 countries.

“Things like tax deductions, subsidies: they have to work hand in hand to attract private capital,” Paris told Reuters, adding that his firm is being cautious about investing in a heating and energy efficiency venture in Britain pending clarity over regulation.

British finance minister Jeremy Hunt on Wednesday announced long-term tax incentives to boost business investment — key to speeding up the slow economy — and backed proposals to provide more support for foreign firms seeking to invest in the country.


Britain’s standing among foreign investors started to weaken around 2016 when its vote to leave the EU triggered years of uncertainty around its trading relationships.

As well as facing greater competition from countries such as Germany and France, it has more recently faced the US offering billions of dollars in renewable subsidies, a plan which prompted the EU to relax its stance on state support.

Accountancy firm EY says total FDI projects into Britain fell 6.4% to 929 in 2022, putting it second in Europe behind France on 1,259. It slipped to third for perceived attractiveness, behind Germany and France.

Overall business investment has also waned. Britain stands only 4% above its mid-2016 level, compared with 8% in Germany, 28% in the US and 30% in France, a Reuters analysis of OECD data shows.

Alina Osorio, head of Fiera Infrastructure which has solar, fibre, waste and ferry assets in Britain, said her investors routinely express concern over exposure to the country with its stagnant economy and shifting policies.

Britain cannot “sit on its laurels and say, well, in the past, everybody wanted to invest in the UK and hence this is the way it’s going to be”, she said.

Mikhail Taver of Delaware-based Taver Capital, a global venture capital fund focused on artificial intelligence investments, summarised Britain as “very good logistics-wise, good aspiration-wise, medium economy-wise, uncertain policy risk-wise”.


Britain, which is weighed down by debt after the Covid-19 pandemic, urgently needs to upgrade its ageing infrastructure, and drive the digitisation and electrification of its economy.

Both Sunak’s government and the opposition Labour Party, which holds a 20-point lead in polls ahead of an election expected in 2024, say they want to attract private capital. But companies and investors say that a focus by regulators on limiting costs for bill-payers in sectors such as water, telecom and energy has crimped investment.

With no clear industrial strategy, Britain has provided ad hoc support. In 2023 it offered a financial package to India’s Tata Group to help secure a new electric vehicle battery plant.

Richard Harrington, a former minister, was commissioned by the government earlier in 2023 to review FDI policies after Britain missed out on a number of investments, including drugmaker AstraZeneca choosing Ireland for a new plant.

Harrington told Reuters the idea that the government could avoid being involved in business is “completely dead” and other states are “far more professional, far more slick” with “a far more definitive decision-making process.”

Sunak’s government has backed his idea of a concierge service for big investors after many told him they felt “messed around” and were bounced from department to department, unable to secure a decision on support or subsidies.

British investment minister Dominic Johnson said the government will be in listening mode at the gathering on November 27 to hear how it can remove hurdles.

“It’s a competitive world out there,” Johnson told Reuters. “In order to stand still, we have to keep running quite fast.”


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