P&O Ferries is one of the few subjects on which Britain’s political class agree. Its summary sacking of 800 British seafarers and their replacement with cheaper, largely foreign agency staff is universally considered one of the most outrageous acts in the recent history of labour relations.

Louise Haigh was among the first and loudest to call it out, attending protests in Dover as shadow transport secretary the day it happened in March 2022. As a minister, however, the stakes are higher.

By describing P&O as “rogue operator” at the same time as her colleagues were trying to persuade its parent company to shell out £1bn, she has received a sharp lesson in the trade-offs required in office.

DP World has been smarting at the public response to P&O’s actions for more than two years, but it has never apologised, arguing it was justified by the survival of the company.

Reputations recover, bankrupt companies do not, appears to have been the view from Dubai.

So it should not have been a surprise that DP World’s leadership and its chairman, Sultan Ahmed bin Sulayem, took offence when P&O’s sins were deliberately and publicly dredged up a matter of days before he was due to endorse the government at its Investment Summit.

With control of a company that generated almost £14bn in revenues and operates in more than 60 countries, he has a choice about where and when to activate capital.

He will not now travel to London, the expansion of London Gateway is on hold, and the Investment Summit has suffered an embarrassing blow.

The vibes around the event were already less than perfect, with some investors reportedly yet to commit and critical arrangements amid general concern that Labour is courting overseas wealth while simultaneously plotting to tax it in the budget.

Read more from business:
UK economy returns to growth
US national debt heading for historic highs
Government ‘using Post Office as shield’

There is always a cosmetic element to these events. Multibillion-pound investments take months not days to agree, but royal receptions and prime ministerial handshakes help, and politically and practically, Sir Keir Starmer needs this one to be a success.

His government has an ambitious plan to deliver growth through investment in infrastructure and technology on a scale that is beyond the means of the UK capital markets. We are reliant on the kindness of strangers, as the saying goes, and that sometimes requires compromise.

To pick one at random, the head of Saudi Arabia’s Public Investment Fund is scheduled to attend on Monday, a year after he gave a keynote session at a similar event hosted by Rishi Sunak, with barely a peep of comment.

The summit occurs on the 101st day of the Starmer government, and Downing Street sees it as an opportunity to reset and move on from weeks of squabbling over advisers and freebies.

The bungling of DP World’s investment signals more choppy seas.

The government’s Investment Summit has suffered a major blow after ports and logistics giant DP World pulled a scheduled announcement of a £1bn investment in its London Gateway container port, following criticism by members of Sir Keir Starmer’s cabinet.

Sky News understands the Dubai-based company’s investment was due to be a centrepiece of Monday’s event, which is intended to showcase Britain’s appeal to investors and will be attended by the prime minister and Chancellor Rachel Reeves.

DP World’s investment in the port is now under review however, following criticism by Transport Secretary Louise Haigh and Deputy Prime Minister Angela Rayner of its subsidiary P&O Ferries.

In March 2022, P&O caused huge controversy by sacking 800 British seafarers and replacing them with cheaper, largely foreign workers, a move it said was required to prevent the company from collapsing.

Announcing new legislation to protect seafarers on Wednesday, Ms Haigh described P&O as a “rogue operator” and said consumers should boycott the company.

In a press release issued with Ms Rayner, Ms Haigh said P&O’s actions were “a national scandal” and Ms Rayner described it as “an outrageous example of manipulation by an employer”.

While Ms Haigh has previously criticised P&O’s actions, the strength and timing of the ministers’ language undermined efforts by the Department for Business and Trade to make the Investment Summit a turning point for the government and the economy.

Hundreds of business leaders and investors, including representatives of US private capital and sovereign wealth funds, will attend the event in the City of London, as the government tries to drum up billions of pounds in foreign investment to fund its plans.

The event is seen by Downing Street as an attempt to reset Sir Keir’s premiership after a faltering first 100 days mired in rows about his advisers and acceptance of freebies.

As well as losing for now a £1bn investment in the UK’s key strategic infrastructure, the apparent lack of coordination between ministers will again focus attention on the competence of government operations.

It is understood the decision to pull the announcement and review an investment that has been in negotiations for months was made personally by DP World’s chairman Sultan Ahmed bin Sulayem.

He had been due to attend the Investment Summit on Monday, but will now not travel to London.

Read more from business:
UK economy returns to growth
US national debt heading for historic highs
Government ‘using Post Office as shield’

Mr Sulayem has previously refused to apologise for P&O’s actions, saying the summary sackings were a decision made by local management and ultimately ensured the survival of the company and thousands of jobs that were retained.

The £1bn investment was intended to expand the London Gateway facility, adding two new berths to the four that already exist and a second rail terminal. The expansion would have seen it become the UK’s largest port by volume.

DP World generated global revenues of almost £14bn in 2023 and operates in more than 60 countries. It has already invested £2bn in London Gateway, and also owns and operates Southampton’s container port.

A DP World spokesman told Sky News: “The investment is under review.”

Responding to Sky’s story, shadow science secretary Andrew Griffith said: “This is further evidence that Angela Rayner may have two jobs but she’s costing other people theirs.

“It is not surprising that when you take union laws back to the strike-hit 70s, that the UK becomes less investable. It’s not canapés at summits that sway investors, it’s having a sensible environment to do business.”

Prime Minister Sir Keir Starmer hailed next week’s summit when he was quizzed about Sky’s story on Friday.

When asked if his cabinet members had cost the country investment, he replied: “In the last I think four weeks we’ve had at least five or six huge investments in the UK, including £24bn today.

“We’ve got a massive investment budget, summit coming up on Monday where leading investors from across the globe are all coming, to the UK.

“This is very, very good for the country, very, very good for the future of jobs. It’s just the sort of change that we need to see.”

Steve Rotheram, the Labour mayor of the Liverpool City Region, defended the criticism of P&O, saying that while the UK needed as “much investment in this country as possible”, he had “very little sympathy with a company that sacks its workforce”.

“You can’t just fire and rehire,” he told Sky News. “You can’t just sack workers – there are protections in this country for everybody.”

Here in the UK, politicians are fixated with the level of the national debt.

They fret about the fact that it is now knocking on for 100% of UK gross domestic product (GDP). They incorporate it into their fiscal rules, compelling them to get it falling (even if they rarely succeed in practice).

So you might be surprised to learn that while Britain’s national debt is projected to fall in the coming years, the equivalent figure in the US is projected to balloon to completely unprecedented levels.

In fact, while Britain and America’s state debt levels have moved in near lockstep with each other in recent decades (as a percentage of GDP, both were in the mid-30s pre-financial crisis, in the 1970s and 1980s afterwards, then approaching 100% after COVID), they are about to diverge dramatically.

So, at least, suggest the latest projections from the Congressional Budget Office and Britain’s Office for Budget Responsibility (OBR). They show that while both UK and US net debt are just shy of 100% this year, America’s will rise to 125% by the middle of the next decade, while Britain’s will fall to 91%.

Now of course, these are just projections, based on the assumption that each country follows the current plans laid down by their respective administrations. Those plans could well change. But even so – the gap would amount to the biggest divergence in post-war history.

The reasons for it are many: in part, the US is raising less in taxes, thanks in part to a series of tax cuts and exemptions which began under Donald Trump but continued, for some recipients, under Joe Biden.

In part it’s because it’s spending more, both on discretionary measures like the Inflation Reduction Act (a series of subsidies for green tech firms) and non-discretionary schemes like Medicare.

Either way, the US is slated to borrow more in the coming years than it has done in any comparable period in recent memory. And the upshot of that is a seemingly perpetual increase in the federal debt, up to that 125% of GDP record level.

Which raises the question: what are the candidates in this election planning to do about it? The short answer is: not much.

Indeed, according to the latest analysis from the non-partisan Committee for a Responsible Federal Budget, based on the promises made by Kamala Harris and Donald Trump, the gap will only widen – whichever party wins the election.

Read more
US officials threaten to break up Google
Analysis: Trump returns to where he was shot

It found that the Ms Harris campaign’s plans, which involve considerably more spending, imply the federal debt rising to a record 133% of GDP.

Perhaps that’s unsurprising, but the real shock of the analysis is that it found Mr Trump’s plans imply an even steeper upward trajectory, as he slashes taxes for a range of households and businesses, and continues some of the existing spending plans. While the Republicans are traditionally seen as the party of fiscal prudence, a second Trump administration would send the federal debt heading towards 142% of GDP.

Follow Sky News on WhatsApp

Keep up with all the latest news from the UK and around the world by following Sky News

Tap here

👉 Click here to follow The Ian King Business Podcast wherever you get your podcasts 👈

All of these figures would be record numbers. And for some economists that raises an important question: at what point do investors in UK government debt – and the dollar more widely – balk at these spending and borrowing plans?

Since the US dollar remains the world’s reserve currency, Washington is often said to enjoy an “exorbitant privilege”, allowing the government to avoid the constraints of many other nations. But with the federal debt heading towards these unprecedented levels – regardless of which candidate wins – the country’s economic story is heading into unfamiliar territory.