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Britain knows how to throw a good party, as any of the 200 decision-makers hobnobbing around Hampton Court Palace with champagne flutes on Monday will no doubt testify.
The knees-up has been put on by Rishi Sunak to entice billions in overseas funding from the world’s rich and powerful, who have been promised a “quintessentially British experience” of Beefeaters, red carpets, afternoon tea and a trip to Buckingham Palace with the King.
That’s just the sort of pomp and ceremony that international bigwigs would expect from a country known for its elaborate parties and obsession with upper-class debauchery.
The pandemic was never going to spell the end of this glitzy schmoozing and power-dining. Just last Tuesday, it was hard to hear above the guffaws of businessmen chugging wine and sharing plates of langoustine at one of London’s most popular business lunch spots.
The party is on and the revellers want it to be remarkable.
But then comes the hangover. Although many overseas investors will fly home from their visit this week starstruck by the spectacle, they will know full well that what they have just experienced is the equivalent of a heavily edited press release.
Nice to share a cucumber sandwich with the King, but it won’t help bring money into Britain if those seeking deals still end up feeling snubbed by Whitehall and persistently passed from department to department.
In a 124-page report published last week, executives said they were fed up with chasing the UK’s revolving door of ministers and found it easier to do business in France because President Emmanuel Macron picks up the phone, texts directly and rolls out the red carpet for them.
The review into UK foreign direct investment, led by Lord Harrington – who served as a business minister under Theresa May – found that bureaucracy and repeated policy changes are behind the investment gap between the UK and other rich nations.
The number of foreign direct investment projects here has fallen sharply over the past few years, according to the Department for Business and Trade, while investment as a share of GDP has consistently lagged other G7 nations.
Executives are unsurprisingly frustrated that there have been seven business secretaries and seven chancellors since the 2015 election. Time and time again investors complain that the UK is “disorganised, risk-averse, siloed and inflexible,” Lord Harrington wrote in his report, adding that we are relying on a system where politicians shove financial decisions to a “series of semi arm’s length institutions”.
In his words, it’s all become a little too “slow and cumbersome to compete in the modern world” and there is a sense that engaging with the Government on investment matters can be a “fruitless endeavour”. As one investor put it: “We’ve been brought to water so many times and then dismissed”.
That’s not the only sorry tale that Rishi Sunak will hope isn’t circulated at this afternoon’s tea. Hosts will work hard to steer any chit-chat away from the subject of HS2, a project running off the rails so fast that it makes the country look unable to deliver infrastructure projects as planned, on time or on budget.
Having repeatedly been described as a national embarrassment, there have long been warnings that the debacle surrounding the controversial high-speed rail scheme could send much-needed investment elsewhere.
The splendour of today’s royal venues is unlikely to distract conversation away from chaotic infrastructure projects or, say, the £1.9 trillion that has been pulled from UK stock markets over the last 23 years.
That decline has become such a worry that FTSE 100 chiefs collectively wrote to Jeremy Hunt earlier this month arguing that the “vicious cycle” of Britain’s stock market decline must end. The call to action came after Hotel Chocolat was sold to US conglomerate Mars at a premium, and just as investment bank Morgan Stanley warned pessimism towards the UK economy over the past decade has resulted in the country’s stocks and corporate bonds becoming the cheapest in the world.
A damning report by bank Peel Hunt also argued last month that Britain’s smaller companies are trapped in a “doom loop” that risks destroying a crucial part of the UK’s financial ecosystem as more companies are leaving London’s markets than joining.
“Valuations are low, liquidity is reducing, investors are seeing withdrawals and there is little desire to IPO,” said Charles Hall, Peel’s Hunt head of research. “The pace of decline is relentless.”
Well, none of that will make it into any of the speeches later. And nobody will want to be seen as the party pooper while rubbing shoulders with global titans at Hampton Court, the gardens of which include the world’s oldest puzzle maze and the descendants of Henry VIII’s deer herd.
It will be quite the show, but after years of frustration, overseas investors need much more than a good party to be convinced that they should send their money this way.
Having grown increasingly frustrated with Downing Street’s own set of twists and turns, those jetting into London will be on the lookout for any party tricks. An afternoon tea with the King will not be enough to reverse the damage of the past decade.
The UK knows how to throw a party but investors won’t be fooled
Pomp and ceremony won't distract from the sorry reality of Britain's decline