Away from the Westminster gossip and Brexit scare stories, Britain and its second city are well and truly open for business.
In early 2016, the UK government led by the now long-forgotten ex-Prime Minister David Cameron, warned that if Britain left the European Union, the economy would collapse. The Governor of the Bank of England warned of recession and mass unemployment. However, the direct reverse happened – so what is really happening in the UK economy and should GCC investors be taking a second glance at what’s on offer?
Fiscally, the UK’s position has improved since the Brexit vote. The economy grew by 2% in 2016 and 1.8% in 2017. The doomsday predictions of a recession never transpired. The fall in Sterling has made exports cheaper and consequently, UK export growth reached a nine-month high in December 2017 as it continued to outperform Europe’s other largest economies. UK exports grew 13% year-on-year in Q3 2017.
Foreign direct investment in UK businesses has continued to rise and is set to eclipse $2 trillion for 2017. In addition, the Office for National Statistics reports that for Q3 2017 (a year after Brexit), the unemployment rate fell to 4.3%, down from 4.8% for a year earlier and the joint lowest since 1975. Brexit has not stopped companies from hiring. In fact, exactly a year after the Brexit vote the Lloyd’s Bank Confidence Index rose to 24% – an 18-month high, despite Brexit uncertainty.
Britain’s robust economy and seemingly unstoppable confidence may be thanks partly to huge levels of government investment in infrastructure, digital communications and housing, which forms part of the country’s wider $32 billion National Productivity Investment Fund. Projects include $2.7 billion for affordable housing and a $3.2 billion Housing Infrastructure Fund for new roads, bridges, energy networks and other utilities.
One of the country’s biggest ever transport projects, Crossrail, commences operations in 2018: a completely new railway network for London and the South East of England that has generated 55,000 new jobs and $58 billion for the economy. For the nation’s second city, Birmingham, a $76 billion high-speed national railway (HS2) is a game-changer, making it the UK’s best-connected city.
HS2 will slash journey times to Britain’s other major cities. London will be 49 minutes away and it’ll take only 41 minutes to get to Manchester; and Manchester airport will be only 32 minutes from the city centre, which was itself transformed in 2017 by an $850 million regeneration of its famous New Street Station.
Gulf investors will be particularly welcome in a city with major populations from the Middle East, India and Pakistan. Over 20% of Birmingham’s residents are Muslim and 46.9% of the population are ethnic minorities. Major spoken languages include Arabic, Hindi, Tagalog, Pashto, Urdu, Polish and Tamil; and GCC investors can easily find professional services companies that understand their needs on issues pertaining to business travel visas, relocation, tax and the general business environment. Robina Shah, CEO of Birmingham’s highly specialised immigration law firm Optimus Law, says “We’re seeing soaring numbers of investors from the Middle East and Asia come to us for help in securing a Tier 1 Investor Visa and Tier 1 Entrepreneur Visa – I think this shows that Britain is well and truly open for business. Optimus Law understands how important it is for people from different parts of the world to feel at ease when making their applications – and when they get to the country. “Here in Birmingham, we are able to reassure Gulf investors that they’re working with legal advisors who ‘get’ their cultural needs. I know how important that is.”
Making that journey to the UK and to Birmingham itself is now even easier for GCC investors – and they can do it with an airline they know well. Emirates Airline added a second A380 to its Dubai-Birmingham route in 2017, increasing capacity to over 1200 passengers every day. Some of the Gulf’s biggest firms have already made the journey. Saudi Arabia’s largest company, the diversified manufacturing firm Saudi Arabia Basic Industries Corporation (SABIC), has its UK headquarters in the Birmingham suburbs.
During a visit to Birmingham, the UAE’s Sheikh Sayed Ali Hashmi, who oversees the UAE legal system, said that Birmingham’s diversity was an attractive prospect for investors in the Middle East. “Birmingham represents globalisation in the right way, especially with its many cultures.” Birmingham is one of the most ethnically and culturally diverse parts of the UK. It’s also notable that investment in Birmingham is coming from all corners of the globe, providing Gulf investors with international opportunities from a Birmingham base. Recent examples include one of North America’s biggest engineering and construction firms, Burn & McDonnell, which is opening its first UK office in Birmingham in the city.
Birmingham is viewed by many as the beating heart of Britain and despite the political machinations and vested interests of the EU and establishment media, the well-kept secret is that Britain and its booming cities are well and truly open for business.