When David Cameron announced that he planned to hold a referendum on the UK’s membership of the European Union the über-Europhiles warned that the debate would damage overseas investors’ willingness to commit to Britain. We now know that that scaremongering was not well founded. Data released last month from UK Trade and Investment found that investment into Britain during 2013 rose to the highest level since its monitoring began in 2001. Nearly 70,000 new jobs were created as investment rose to £975bn. A particularly encouraging dimension of the UKTI data found that investment in the so-called sunrise knowledge industries that will be creating the wealth and jobs of tomorrow increased by 50% last year. A third of all Europe-wide investments in the software sector are made in Britain – making it the clear EU leader in this booming sector.
As policy makers consider how to maintain this encouraging trend a lot of attention will have to be given to the nation’s infrastructure – notably airport capacity, transport connections to and within the North, energy diversity and the availability of affordable housing. Much will also depend upon the Chancellor’s refashioning of the corporation tax regime and the steady reduction to a 20 per cent rate by next year. This globally competitive tax regime – twinned with the reduction in the top rate of income tax to 45p – sends an important message to the world’s entrepreneurs that their talents are welcome in Britain and that they will be rewarded.
Interestingly, however, when the professional services firm EY invited existing and potential investors to rank the attractiveness of the UK, the top set of factors were non-economic. They were the quality of life in Britain, our diversity, culture and language. The British Council has published similar findings. “Culture and historical attractions” were the number one characteristic for 28% of people interested in doing business internationally, it reported. A recognition of this motivated the “Britain Is Great” advertising campaign. That campaign – targeted at investors, tourists and students – highlighted Britain’s countryside, its heritage, arts and sport as much as the UK legal and tax systems.
When people from overseas are asked which of Britain’s cultural assets are most attractive to them, top of the pops are our historic buildings and attractions (with 44% mentioning these). Then comes arts institutions (43%), then architecture (29%), food (24%), visual arts (22%), music (22%), fashion (22%), nightlife (21%), literature (21%), theatre (19%), festivals (18%), sport (17%), film (17%), design (15%), television (10%) and then dance (10%). The leading investor into Britain – America – is very positive about Britain’s cultural assets. 71% of Americans believe we have innovative and creative arts industries and 62% think we have world leading sports teams and events.
Many of Britain’s cultural assets require significant public subsidy. I’m thinking of London’s 2012 Olympics. Free museum entry. Maintenance of great, historic sites. These subsidies may help pay for themselves in terms of the tourists and investors they attract – although I’d like to see independent evaluations of these benefits rather than reports produced by the heritage industry. Many of our cultural assets require no subsidy, however, and these deserve special mention for the role they are playing in helping Britain to become not just a cultural superpower but, back where this piece started, such a magnet for inward investment.
London’s booming nightlife, for example, is an entirely private sector phenomenon. The brightest and best young people – underpinning those sunrise industries – come to play and work hard. But one of the most captivating jewels in Britain’s cultural crown is the much maligned Premier League – which kicks off again tomorrow. I’ll be at the very first game of the new season, hoping that Louis Van Gaal can do a better job for Manchester United than David Moyes.
Since England’s miserable early exist from the World Cup there has been a lot of moaning about the adverse impact of the Premier League and its legions of foreign players on the national team. But the Premier League’s overall contribution to the UK economy and to its cultural power is enormous. More premier league footballers played in Brazil 2014, for example, than from any other league. There were twice as many Premier League footballers at the World Cup than footballers from Spain’s La Liga, for example. This explains why the Premier League is the world’s most watched, reaching into 720 million homes in 212 territories – earning a rumoured £2 billion in global TV rights.
It also explains why 900,000 football-loving tourists come to Britain each year – spending £700 million in Britain’s hotels, restaurants and, yes, in our bars – often during the quieter and colder months of the year. The average spend of a football tourist at £785 per person is significantly more than the £583 associated with the average tourist. “VisitBritain” is keen to increase these numbers in the years ahead and its new “Take Me There” campaign is targeted on China, the United Arab Emirates, Norway, Sweden, Hong Kong and other key markets. 1.5 million Japanese football fans have already watched a video ad promoting package tours to the North West that stars Shinji Kagawa, one of their national team’s stars and a Manchester United midfielder.
Capitalists should love the Premier League already. Like all of the best free market institutions it’s blind to skin colour, nationality and background. If you have talent you can flourish in the world’s most exciting league. And if you are one of those people who don’t like football you can still revel in the £1.3 billion contribution that the Premier League makes to Treasury revenues. Its contribution to the attractiveness of the UK as a global destination for tourists and investors is even greater – and all without public subsidy.
