Inward investment success for UK

The Indian owner of the Corus steel works in Port Talbot is investing in it

Foreign firms continue to see the UK as an attractive place to do business, official figures show, with a 23% rise in jobs created by new investments.

More than 45,000 new jobs were created last year by companies launching in the UK or expanding existing operations while 58,000 jobs were safeguarded.

Despite uncertainty about the state of its economy, US firms accounted for 30% of all new investments during the year.

The data was an "endorsement" of the UK's business image, ministers said.

'Heavy hitter'

The figures include acquisitions of British businesses as well as direct investments by foreign-owned companies in England, Wales, Scotland and Northern Ireland.

The total number of new projects rose by 10% to more than 1,570, with expansions of existing operations accounting for the bulk of the increase.

This impressive performance exemplifies that now, more than ever, the UK economy is synonymous with opportunity and global potential Trade minister Lord Jones

In contrast, the number of mergers and acquisitions actually fell 3%, reflecting the impact of the credit crunch on firms' ability to raise finance for big deals.

Significantly, the number of new investments involving research & development capabilities rose 83%, since these projects generally involve highly-paid jobs.

The number of investments in call centres, service industries and company headquarters increased but those in manufacturing and distribution fell.

Trade minister Lord Digby Jones said the figures - compiled from information given to national and regional development agencies - showed that the UK continued to "punch above its weight" on the global business stage.

"In a year of international financial uncertainty this impressive performance exemplifies that now, more than ever, the UK economy is synonymous with opportunity and global potential," he said.

Tax threats

The figures are a boost for the government, which has faced growing criticism from big business about its corporate taxation policies.

A number of British firms have recently said they will quit the UK to move to lower-tax destinations such as Ireland.

Advertising boss Sir Martin Sorrell said on Wednesday that he was "deeply troubled" by government proposals to raise corporation tax on some business income.

"I've never seen an issue cause so much resentment and concern as this issue has caused among UK corporates," he told the BBC.

His WPP business might consider moving its headquarters abroad if the government did not reconsider its plans, he added.

"We have said if the government persists with its approach we will consider that and we do think that is a high probability if they stay where they are."