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Brexit

UK trade minister insists ‘time is right to invest in Britain’

Speaking in Hong Kong, Lord Price says devaluation of sterling has made British assets more ‘affordable’

PUBLISHED : Wednesday, 06 July, 2016, 4:33pm
UPDATED : Thursday, 07 July, 2016, 12:25pm

British Trade and Investment Minister Lord Mark Price says now is a prime time for overseas investors to be looking at the UK, and has underlined the country has been, and will continue to be, a tolerant place for migrants, even after its surprise vote to leave the EU.

“Sterling has been devalued, so this is a great time to buy British products around the world, and also British assets are now very affordable,” Lord Price, a former managing director of supermarket chain Waitrose, told a media briefing in Hong Kong on Wednesday.

“Entrepreneurial businessmen should now be either buying British goods or looking to make significant investments in the UK.”

Since Britons voted to leave the EU two weeks ago, the pound has plunged against most major currencies, and on Tuesday reached a 31-year low against the US dollar.

The UK has been attractive to foreign direct investment, both in its own right, and as a gateway for companies looking to access the European Union.

During last year’s state visit to the UK by Chinese President Xi Jinping, British Prime Minister David Cameron unveiled up to 40 billion pounds worth of trade and investment deals between the two countries.

Cameron remains prime minster, but after backing the campaign to stay in the EU, he resigned and the ruling Conservative party is currently holding a leadership election, the winner of which will succeed him as PM.

Many analysts have warned, however, that the UK’s vote to leave the EU will have a negative effect, at least initially, on the British economy.

“The UK’s decision to leave the European Union will lead to a prolonged period of uncertainty that will weigh on the country’s economic and financial performance and will be credit negative for the UK sovereign and other rated entities,” said Moody’s Investors Service in a research note.

The decision may also negatively affect the rest of the world.

Standard Life Investments said in another note, in light of the Brexit vote, “we have formally revised down our global economic forecasts for 2017 by 0.2 percentage points to 3.1 per cent, because we now expect developed market growth to edge lower as the UK enters a technical recession and Eurozone growth slows to trend-like growth”.

Following his trip to Hong Kong, Price will travel to Beijing for two days of meetings with officials before joining G20 trade ministers in Shanghai.

Being narrow, small or introverted is not the future for Great Britain
British Trade and Investment Minister Lord Mark Price

He said that he was optimistic the UK was in a strong position to strike new trade deals.

“We believe that it is the right thing for the UK to have stronger relationships with China, as we do with other countries.

“What we do now, should enable us to have more relationships. I don’t think London’s role [as a financial services hub] will be diminished, and we will have longer discussions with China about financial services and the belt and road.”

“Being narrow, small or introverted is not the future for Great Britain,” said Price.

It remains to be seen whether leaving the EU will make it easier or harder for the UK to conduct trade deals. Speaking before the referendum, US president Barack Obama said that an independent UK would be “at the back of the queue’ when came to negotiating a trade deal with the US, for example.

During the referendum campaign a number of senior members of the ‘leave’ campaign promised tighter controls on immigration, and an opinion poll from IPOS Mori conducted before the vote found that issue topped voters’ concerns.

Lord Price said, however, that for Britain to become the “most vibrant and greatest trading nation in the world, we need the brightest and we need the best”.

“All the people running for prime minster are saying that migrants will stay.

“We haven't had people say that we won’t have migration, we haven’t said that we won’t bring in people to make our country stronger,” he added.

“If that were to happen, then I would find that difficult to support personally.”

This story has been amended to correct a reference to US President Barack Obama.