The pro European Union minority are always telling us how much business likes the EU, and how it is a superior arrangement to our other trade, business and investment agreements with the rest of the world. Yet when it comes to where business puts its money, they shy away from the EU.
The figures for UK investment abroad by UK companies show that they have invested just £20bn in Germany over the years, only a shade more than in non EU Switzerland, a far smaller country. Meanwhile corporate UK has invested a mighty £210bn in the USA and £40 bn in Hong Kong and China. £36bn in Australia and £27bn in Canada compares to a total investment in Italy with a much larger population of just £11bn.
All this goes to show that the selective pro EU voices of UK business do not tell us the truth about the relationships. After more than 40 years in the EU we still have a much much larger business commitment to the Commonwealth and the USA than to the main EU countries. It is true the figures show large investments by the UK in Luxembourg and the Netherlands, but that is not a set of underlying investments in these countries. It represents a tax efficient means of investing elsewhere, usually outside the EU. The large £40bn invested in our own non EU offshore islands (Isle of Man and Channel islands) also reminds us of the power of lower taxes to attract business money.
Pro EU people always talk about trade in physical goods. They do not talk much about trade in services, where we do far more business outside the EU than in the EU, and always ignore the figures for overseas investment by UK companies.
Investing in a foreign country is a far greater commitment and far deeper and longer term relationship than buying manufactures from abroad. Judged by that standard, UK business thinks the US is the most important place by far to do business, followed by a range of Commonwealth countries. Tax rates, levels of regulation and the cost of government are amongst the features that put UK business off investing in the rest of the EU.
The lack of such investment flows should worry EU enthusiasts. It should lead the Brussels government to ask why is such long term commitment so unpopular? They could start by looking at the whole range of policies they pursue that are not business friendly.