Britain’s tax rate is neutral at best when it comes to attracting investment, and as international competitors up their game, we may need to go further just to stand still, says Tim Sarson

How attractive is the UK as a place to invest? It’s confusing, isn’t it? In the last few weeks we’ve had a procession of US technology giants announcing multi-billion dollar Artificial Intelligence (AI) datacentre projects. But in the same month big pharma firms reported that they are freezing planned developments here. These are just the most headline grabbing of a constant stream of stories that raise the question, are we open for business or not?

I’m often asked this. I’m a tax specialist so I can only really answer in any depth about our tax system, but it’s impossible to do so without speculating on the wider context.

Earlier this month, the Resolution Foundation published a sobering report. The main message: UK household living standards have stagnated in the last 20 years. This is largely due to our productivity problem and, in particular, the lack of private sector investment. Our output per worker is now 24 per cent below the USA, and 20 per cent and 13 per cent behind Germany and France respectively. According to the ICAEW UK capital investment collapsed during the Covid pandemic, recovered by 2022, but has since trundled along and if anything fallen a bit.

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