Blow to No 10’s investment summit as port giant pulls £1bn announcement over P&O row
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.
Transport Secretary Louise Haigh. Pic: PA
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.
Ms Haigh suggested consumers should boycott P&O Ferries. Pic: PA
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.
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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.”
Post Office campaigner Sir Alan Bates is yet to receive a reply from Sir Keir Starmer, despite writing to him over a month ago.
Sir Alan said he had written to the prime minister to remind him the “clock is still ticking” on a financial redress deadline for victims.
In his letter, he demanded a March 2025 deadline for compensation for sub-postmaster victims of the Horizon scandal.
Sir Alan confirmed to Sky News he was yet to hear back from the prime minister.
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“It was over a month ago,” he said.
“I sent him a reminder yesterday. I told him the clock is still ticking and it’s now five months from the March deadline, which I’m told is still achievable by other professionals.
“So let’s get on with it, that’s all we want. Get on with it.”
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A £15bn merger between two of the UK’s biggest mobile networks could get the green light – if they stick to their commitments to invest in the country’s infrastructure, the competition watchdog has said.
The Competition and Markets Authority (CMA) said the merger of Vodafone and Three had “the potential to be pro-competitive for the UK mobile sector”.
Announced last year, the proposed £15bn merger would bring 27 million customers together under a single provider.
The watchdog previously warned that tens of millions of mobile phone users could end up paying more if the merger went ahead.
However, the two groups recently set out plans to protect consumer pricing and boost network investment.
The CMA has now laid out a list of “remedies” required for the deal to go-ahead.
They include the networks committing to freezing certain tariffs and data plans for at least three years to protect customers from short-term price rises in the early years of the network plan.
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From September: ‘A transformation for the UK’
Stuart McIntosh, chair of the inquiry group leading the investigation, said on Tuesday: “We believe this deal has the potential to be pro-competitive for the UK mobile sector if our concerns are addressed.
“Our provisional view is that binding commitments combined with short-term protections for consumers and wholesale providers would address our concerns while preserving the benefits of this merger.
“A legally binding network commitment would boost competition in the longer term and the additional measures would protect consumers and wholesale customers while the network upgrades are being rolled out.”
Today’s announcement is provisional, with a final decision due before 7 December. The inquiry group is inviting feedback on today’s announcement by 5pm on 12 November.
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The CMA also published a list of potential solutions – which it called remedies – to issues it identified with the merger.
If the networks want the merger to go ahead, the watchdog requires Vodafone and Three to:
• Deliver a joint network plan to set out network upgrades and improvements over eight years;
• Commit to keeping certain existing tariff costs and data plans for at least three years to protect customers from price hikes;
• Commit to pre-agreed prices and contract terms so Mobile Virtual Network Operators (MVNOs) – mobile providers that do not own the networks they operate on – can obtain competitive wholesale deals.
Vodafone and Three are two of the biggest mobile firms in the UK, and their networks support a number of MVNOs including Asda Mobile, Lebara, Voxi, and Smarty.
Responding to the watchdog’s announcement, a spokesperson for Vodafone on behalf of the merger said: “The merger will be a catalyst for positive change.
“It will bring significant benefits to businesses and consumers throughout the UK, and it will bring advanced 5G to every school and hospital across the country.
“The merger is also closely aligned with the government’s mission to drive growth and to encourage more private investment in the UK.”
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Earlier this year, Three’s chief executive hit out at the UK’s “abysmal” 5G speeds and availability as he urged regulators to approve the company’s merger with Vodafone.
Robert Finnegan noted his firm’s “cash flows have been negative since 2020 and our costs have almost doubled in five years, meaning investment in [the] network is unsustainable”.
“UK mobile networks rank an abysmal 22nd out of 25 in Europe on 5G speeds and availability, with the dysfunctional structure of the market denying us the ability to invest sustainably to fix this situation,” he added.
Business leaders expressed frustration with ministers on Monday amid a growing budget backlash that bosses said would trigger an “avalanche of costs” and leave them with no choice but to slash investment and increase prices.
Sky News has learnt that bosses of large retail and hospitality companies and trade associations told Jonathan Reynolds, the business secretary, that last week’s budget risked damaging consumer confidence and exacerbating challenges facing the UK economy.
Among the dozens of companies represented on the call are said to have been Burger King UK, Fuller Smith & Turner, Greene King, Kingfisher and the supermarket chain Morrisons.
Mr Reynolds is said to have acknowledged that Rachel Reeves‘s inaugural fiscal statement had “asked a lot” of British business, with James Murray, the financial secretary to the Treasury, understood to have described it as “a once-in-a-generation budget”, according to several people briefed on the call.
Jonathan Reynolds. Pic: PA
One insider said that Nick Mackenzie, the chief executive of Greene King, had highlighted that the increase in employers’ national insurance (NI) contributions would cause “a £20m shock” to the company, while Fullers is understood to have warned that it would be forced to halve annual investment from £60m to £30m as a result of increased cost pressures.
Rami Baitieh, the Morrisons chief executive, told Mr Reynolds that the budget had exacerbated “an avalanche of costs” for businesses next year, and asked what the government could do to mitigate them.
Sources added that the CBI, the employers’ group, said its impact would be “severe”, while the British Beer & Pub Association added that there was now a disincentive to invest and flagged “a tsunami” of higher costs.
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How will the budget affect businesses?
The range of comments on the call with ministers underlines the scale of discontent in the private sector about Labour’s first budget for nearly 15 years.
Only a small number of interventions during the discussion are said to have been in support of measures announced last week, with the Federation of Small Businesses understood to have praised the doubling of the employment allowance, which would see many of the smallest employers having their NI bills cut by £2,000.
The Department for Business and Trade has been contacted for comment, while none of the companies contacted by Sky News would comment.
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