Yngve Slyngsta (pictured), chief executive of Norway’s £590billion state-owned investment fund, dismissed claims by Number Ten and the In campaign that quitting the Brussels club would pose a significant risk to investment
The boss of the world’s biggest sovereign wealth fund yesterday declared that it would invest more in the UK if we vote to leave the EU.
Yngve Slyngstad, chief executive of Norway’s £590billion state-owned investment fund, dismissed claims by Number Ten and the In campaign that quitting the Brussels club would pose a significant risk to investment.
‘We will continue to be a significant investor in the UK at about the same level as we are today and probably even increasing our investments there no matter what happens,’ he said. ‘All changes entail some risk but we would not categorize it as a significant risk.’
Oeystein Olsen, head of the Norwegian central bank which manages the fund, added: ‘The fund will remain a long-term investor. There are long-term risks and there are short-term risks. Brexit is more in the latter category.’
Leave.EU co-chairman Richard Tice said: ‘With David Cameron, Tony Blair and other leading In campaigners trying to scare voters with visions of a Brexit of Mass Destruction, especially with respect to jobs and investment, it’s fantastic to see the CEO of a £600billion sovereign wealth fund – the biggest in the world – providing the voice of reason.
‘In stark contrast to the literally daily scaremongering, this investment superpower says it does not consider Brexit “a significant risk”, and will likely increase its investments in the UK whether we leave the EU or not.’
Norway, which is not an EU member, invests income from its North Sea oil and gas fields in the fund.
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In a second boost to leave campaigners, Iceland’s prime minister, Sigmundur Gunnlaugsson, said that it would seek to do a free trade deal with Britain even if we vote to quit.
‘The UK is one of our most important trading partners and whatever you decide to do we would like to have a free trade deal,’ he said.
Meanwhile, Oxford University academics said that cracking down on EU migration if Britain quits would be unlikely to damage the economy.
Leave.EU co-chairman Richard Tice (pictured) said: ‘It’s fantastic to see the CEO of a £600billion sovereign wealth fund – the biggest in the world – providing the voice of reason'
The Migration Observatory think-tank said that significant restrictions on foreigners would, if all else remained the same, have a ‘relatively small’ impact on the economy.
ALEX BRUMMER'S ANALYSIS
Norway is casting a huge vote of confidence in Britain by vowing to increase its investment in the UK irrespective of Brexit.
The Nordic country sits on the world’s largest sovereign wealth fund, the gains from North Sea oil and gas exploration, with holdings of £590billion. That is a sum equal to one-third of the annual output of the British economy.
Norway’s decision to save and invest the proceeds of oil and gas exploration for future generations is a sharp contrast to what has happened in Britain where large parts of the proceeds have been frittered away by successive governments.
Nevertheless, Norway has huge confidence in the dynamism of the British economy in or out of the EU. Some 10 per cent of its entire sovereign wealth fund is invested in British assets and recently it started investing in UK property buying a share in a refurbished Regent Street in the heart of the capital.
It says it will continue to invest in Britain irrespective of what the voters decide in June’s referendum. Among the holdings held by Norwegian investors in the UK are stakes in some of the nation’s most emblematic companies. The funds hold 2 per cent of luxury goods maker Burberry and Marks & Spencer, a four per cent holding in the insurer Prudential, five per cent of property developer British Land and two per cent in Rolls-Royce. It would seem that Norway has more faith in some of the nation’s blue-chip firms than some of our own investors.
As a nation of just five million people with enormous energy wealth Norway has been in a better position to build a strong sovereign wealth fund than nations with larger populations and more complex economies. Even so the fund represents a triumph for forward planning and careful husbandry.
Migration from the EU contributed only £1.8billion a year to the public finances – equivalent to about 0.25 per cent of government spending. The Migration Observatory pointed out the possible outcomes of Brexit in a briefing paper.
The Leave campaign has said that ditching the EU would allow Britain to seize back control of our borders and slash net migration, the number of immigrants minus the number leaving the UK. It was 323,000 in the year to last September.
The think-tank said: ‘If Brexit led to significant restrictions on EU migration but everything else remained the same, on average the economic impacts on the UK would probably be relatively small in the medium to long-term.
‘If Brexit reduced migration to the UK, it follows that the effects on UK workers across the labour market as a whole would also be small.’
But researchers warned that there could be ‘profound effects’ on some parts of the economy, especially those that rely heavily on low-skilled EU workers such as hotels, catering, agriculture and manufacturing.
The report said: ‘A reduction in the availability of workers in these jobs would require employers to adapt in various ways.
‘Some employers might mechanise processes (such as harvesting or warehouse distribution) to reduce the need for staff, or raise wages to try to make the jobs more attractive. Both of these options are likely to raise costs, which may be passed on to customers through higher prices.’
It added that if customers were unwilling to pay higher prices ‘companies might reduce their output or, potentially, go out of business’.
Carlos Vargas-Silva, senior researcher at the think-tank, said: ‘While the overall economic impacts of potential reductions in EU migration are likely to be relatively small, ending free movement would be more disruptive in some industries than in others.
‘Some businesses now rely heavily on EU migrant workers, and it’s difficult to predict how they would adjust to lower EU migration.’
