Taking back Control or Empowering Big Business?:New Risks to the Welfare State in the post-Brexit Competition for Investment

Capitalist economies depend on private business investment, and all governments in similar states compete to induce businesses to invest through various policy interventions. In so doing, they compete with other governments to retain current investors and to encourage new ones from elsewhere. The implications for policy-making and, by extension, citizens, are huge. The pressure on governments to capture new investment has an impact on taxation policies, workplace regulations, legal protections, public infrastructure and social policies. However, not all governments compete for investment in the same way at the same time, and not all businesses are attracted by the same inducements offered by states, highlighting the possibility that public policies shape investment strategies, just as investment strategies also shape public policies. It is its development of relatively unique and aggressive strategies to capture new investment that places the UK in a vulnerable position post-Brexit. It has successfully attracted mobile corporations to its shores, in part because it has offered a particularly favourable gateway into Europe for foreign capital. This raises questions about how the country will seek to compete for capital investment in future. This paper examines these questions with reference to both theoretical and empirical evidence.