London Daily

Focus on the big picture.
Sunday, Oct 05, 2025

UK needs better skills to win foreign investment battle, finds report

UK needs better skills to win foreign investment battle, finds report

Cheap labour no longer enough to win over firms as other countries invest in improving their workforces
Britain risks being left behind in the increasingly intense battle for investment from overseas unless it can improve the level of skills on offer to foreign firms, according to a hard-hitting report.

A taskforce headed by the former CBI director general John Cridland has warned that it is no longer enough to base the UK’s appeal on cheap labour, as other countries increasingly use well-trained workers as a magnet to attract companies.

The report, by the Skills Taskforce for Global Britain, said countries that successfully brought in foreign direct investment (FDI) boasted workforces with a sophisticated range of skills to attract investors. The taskforce called on the Department for International Trade to adopt a similar approach for the UK.

Cridland said: “For big inward investors, skills matter. If they can’t find them here they will expand in other countries.

“In the past, the UK has had a good record in attracting inward investment, but it has been based on low labour costs rather than on skills. We are now at a tipping point. There is a real risk of the UK being overtaken by other countries where the offer to investors is based on skills.”

The report found that almost half (46%) of foreign firms said they would move their operations abroad if they couldn’t get the skills they needed, compared with just over a fifth (22%) of domestic firms.

In addition, three-fifths (61%) of foreign firms said they would expand overseas if they couldn’t get the skills they needed in the UK, compared with just a third (32%) of domestic firms. The report added that UK FDI was too concentrated in the economically dominant areas of London and the south-east, so creating higher skilled and better paid jobs was vital to the government’s levelling up agenda.

In 2020, Boris Johnson announced a “radical shake-up” of education for over-18s, including a “lifetime skills guarantee”, under which every adult without A-levels would be funded to take a college course for “skills that are highly in demand”.

Cridland said the government needed to appreciate the link between skills and attracting foreign investment. The education department was responsible for skills but not concerned with inward investment, he said, while the international trade department sought to attract inward investment but was not concerned with skills.

The former CBI director general said that when potential inward investors were introduced to the principals of further education colleges in the UK, they were told what courses were currently on offer.

“In places like Ohio, Singapore and the Republic of Ireland, inward investors are asked: ‘What do you need?’ They are getting ahead of the game.”

Cridland said the link between skills and inward investment had not been looked at before and didn’t seem to be a major consideration when FDI policy was being developed.

“At one level this is surprising. As director general of the CBI, I heard week after week from firms across the UK – both UK-owned and those with foreign parent companies – how a lack of skills was holding back their business from growing and innovating.

“But I also know that skills has long been the ‘Cinderella’ of public policy, overlooked because it is complex and too few of the people who make public policy have personal experience of the skills systems in the UK.”
Newsletter

Related Articles

0:00
0:00
Close
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
×