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LONDON – The UK Labor government is hoping to attract foreign capital to the country on Monday, when it hosts the inaugural International Investment Summit in London.
Prime Minister Keir Starmer, Finance Minister Rachel Reeves and Business Secretary Jonathan Reynolds will chair the one-day event at London’s Guildhall, which is expected to be attended by around 200 executives from the UK and foreign.
Former Google chairman Eric Schmidt, Goldman Sachs CEO David Solomon and GSK CEO Emma Walmsley were among the named guests. Newly appointed Investment Minister Poppy Gustafsson, co-founder of British cybersecurity firm Darktrace, will also be on hand to promote the UK as a place to do business.
However, attendees and observers expressed frustration to CNBC about the lack of information surrounding the summit, and details about the location and time were withheld until Thursday. Some people have said in advance that they will not attend, while others still do according to the report was considering whether to fly over or not, as of last weekend.
“Uncertainty about what is happening is undermining the event,” Dr. Bruce Morley, a lecturer in economics and finance at the University of Bath, told CNBC by phone. “There’s a lot of speculation.”
There is widespread frustration over the timing of the summit, which comes just over two weeks before the chancellor’s budget, amid a lack of detail on the radical changes she claims are needed. needed to plug a reported £22 billion black hole in the public finances. The date was determined by the Labor Party’s pre-election pledge to hold a business summit within its first 100 days in power.
Reeves ruled out changes to corporation tax, along with increases in income tax and social security payments to National Insurance. She also withdrew suspected plans to hit private equity bosses with top taxes and pledged to mandate a repeal of the country’s centuries-old policy. “not owned” status for wealthy individuals.
Increases to capital gains tax (CGT) and inheritance tax (IHT) remain on the table, however, with the chancellor said to be considering increasing CGT by up to 39% for the highest taxpayers, according to to The Guardian. That would be a significant increase in comparison Current range from 20% to 28%depending on assets and something investors say could hinder business in the country.
A Treasury Department spokesperson described the report as “pure speculation” in an email to CNBC.
A pro-business Labor government
The event is part of Starmer’s pledge to lead the most “business-friendly” Labor government, with the prime minister telling CNBC last month that his “number one priority is wealth creation yes,” as he used his visit to the US to attract attention. Wall Street Investing.
The Labor Party tried to draw more positive image of the economy after being accused of talk of doom in the the first months at the office. It also sought to position itself as a reliable partner after years of turmoil – including Brexit – a series of prime ministers and a bond market sell-off.
Business confidence, which initially increased after the party’s July election, took a hit in September amid budget uncertainty. Gross domestic product (GDP) slight increase in August after two consecutive months of stagnation, but has struggled to return to the modest highs reached earlier in the year.
British Prime Minister Keir Starmer gives an interview to the media while attending the 79th United Nations General Assembly at United Nations Headquarters in New York, USA on September 25, 2024.
Leon Neal | Via Reuters
Morley said the government would need to tackle productivity inefficiencies if it wanted to revive further growth, and he called on the government to use the summit to target investment in new technologies floating, like artificial intelligence and robotics.
“We are lagging behind our peers in that space,” he told CNBC by phone. This would be a way to catch up by finding incentives to attract these types of companies.”
He added: “The UK would not have had the increase in economic activity without that increase in productivity.”
On Sunday, the government announced the launch of a new industrial strategy and advisory board chaired by Microsoft UK CEO Clare Barclay, designed to focus on eight “areas that drive growth chief”. These include creative industries, financial services, advanced manufacturing, professional services, defense, technology, life sciences and clean energy industries.
