TJM response to the new UK Investment Council

Posted on April 29, 2021
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The UK established a new Investment Council on the 27th April this year. Its aim is to “provide a platform to influential global investors so that they can highlight their perspectives, priorities and concerns relating to UK inward investment.”

Inward investment could help the UK to achieve important aims such as a green recovery post-pandemic. This could include increasing investment to projects that are designed to support local jobs, for example to support the growth of renewable energy or projects such as home insulation.

However, ensuring that investment is supportive of the UK’s important aims in respect of climate change and economic recovery will require a strategy that sets out how this will happen. TJM are concerned that the current structure of the Investment Council does not lend itself to the development of a strategy intended to ensure UK investment policy supports its goal of ‘building back better’.

In particular, we are concerned that:

  1. The purpose and powers of the Investment Council are unclear, there are no published terms of reference. It is therefore not clear whether the primary aim is for the businesses represented to advocate for increased investment in their sectors or whether there will be any discussion of the social and environmental impacts of inward investment.
  1. The scope of the Council’s agenda has not been defined. For example, there is no clarity about whether it will consider the impact of the UK’s existing and potential future investment protection provisions in both Bilateral Investment Treaties and in Free Trade Agreements. Civil society organisations have been raising significant concerns about these provisions for many years.
  1. Membership of the Investment Council is made up exclusively of businesses. None of its members have the primary aim of promoting environmental protection, good jobs or high consumer standards in areas such as food. There is no representation from civil society organisations and it is therefore not clear that concerns about the investment system will be voiced.
  1. Some of the companies involved are engaged in activities that undermine climate goals, including Airbus and Lockheed Martin. Energy company RWE is particularly problematic, given that it is currently using an investment treaty to sue the Netherlands for their plans to phase out coal fired power stations.

TJM believe that the government urgently needs to set out clear terms of reference for the group that includes a requirement to take into account the UK’s broader foreign policy objectives, in particular those on climate change. It should also seek the views of a broader cross-section of organisations.