Branson's Warnings Ignore Record Foreign Investment

Left: Richard Branson, Chairman of Virgin
- The new Mr. Euro?

Record foreign investment has attracted 757 new projects and 52,783 jobs to the UK's economy. A report by the Government's Invest in Britain Bureau (IBB) revealed that the US is the top investor in the UK with 48% of inward investments. A press release by Invest in Britain reveals that the "UK and the US are the largest investors in each others economies."

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Even though our EU partners lag behind the US, Virgin tycoon Sir Richard Branson urged the Government to stop dithering over the euro. Traditionally the pro-euro camp believes that Britain could not survive without the EU. Even this report and the euro's troubles don't seem to dampen the determination of the Europhiles' argument.

Only two days ago, on July 3rd 2000, Andrew Fraser - the head of the IBB - had warned the Government of a "manufacturing meltdown." This warning came from a leaked memo to the DTI. Ruth Lea of the Institute of Directors called this memo "an outrageous bit of spinning ... a gross exaggeration of the role of the European market in the British economy."

Another leaked memo, from Britain's Ambassador to Japan Sir Stephen Gomersall, to Robin Cook has caused Tony Blair further embarrassment. Some, however, think that they were no accident. It is suspected that foreign secretary Robin Cook, trade and industry secretary Stephen Byers, and Northern Ireland secretary Peter Mandelson are behind them. Contrary to the Government's official line of being in favour of the euro 'in principle,' the trio have called for the Government to open up the debate on the single currency.

Pro-euro groups like Britain in Europe, supported by Conservative MPs Kenneth Clarke and Michael Heseltine, want Tony Blair to take the lead on the issue. Yet Gordon Brown continues to affirm that Britain will only join when the "five economic tests have been met."

Sir Richard contradicts the reports findings. He claims in the Daily Mirror and in the Independent that, unless the UK joins the single currency soon, Britain could be "much poorer as a nation and as individuals." He adds: "We should all be clear about what staying out of the euro will mean. Lower investment means fewer jobs, lower living standards, and less government revenue for things such as schools and hospitals." Sir Richard backs up his argument by blaming the high value of the pound. He thinks that this will detract foreign investors, who will look at Ireland or Holland instead.

Branson's proclamation, believes the Democracy Movement's campaign director Marc Glendening is another Cabinet ruse to campaign for the euro by stealth. Even BBC News Online's political correspondent Nick Assinder argued, "One leaked memo on the dangers of Britain staying out of the euro may look like an accident - but two in as many days starts to look like a campaign."

The BBC is often accused of biased reporting in favour of the euro by Eurosceptics. They believe that the leaked memos, predicting doom and gloom if Britain fails to join the euro in the near future, are part of the Government's strategy.

The memos claim that Japanese UK investments will be lost, such as those of the car manufacturer Nissan. "These figures give the lie to the euro lobby's scare stories, which have focussed on some high profile companies with particular problems," said Nick Herbert of the Eurosceptic group Business for Sterling.

The Invest in Britain Bureau's report showed that Japanese firms provide only 7% of the total inward foreign investments. Lord Hanson speaking about the leaked memos on the BBC's Radio 4 said " It is all part of this spin situation, that is going on everyday." He also emphasised that only 15% of Japanese firms operating in the UK believe that Britain would benefit from euro membership.

Mr. Glendening suggested that Peter Mandelson had organised Sir Richard Branson's intervention. He supports Lord Hanson's view that the Government is using others to put forward its own arguments in favour of the euro. Even a euro debate held at the House of Commons today was ill attended by Labour backbenchers and ministers.

Eurosceptics also accuse the Government of trying to divert the public's attention from the report's findings. This will heighten accusations that the Government is pre-occupied by "spin." The leaked memos and Sir. Richard Branson's comments, amongst others, may increasingly point to a campaign. The question is who's running it? If Tony Blair is not behind it, it will fuel media speculation over in-fighting within the Cabinet over the euro.

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