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.
Image: 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.
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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.
Image: 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.
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 Starmerhailed 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.”
Four people have been arrested by police investigating cyber attacks targeting M&S, Co-op and Harrods.
A 20-year-old woman and two males, both aged 19, and a male aged 17, were detained in London and the West Midlands this morning as part of a National Crime Agency (NCA) operation.
They were arrested at their homes on suspicion of Computer Misuse Act offences, blackmail, money laundering and participating in the activities of an organised crime group.
Electronic devices were seized from the suspects and are currently being analysed by forensic experts.
M&S halted online orders, and shelves were empty in shops after the cyber attack on the retailer earlier this year.
The initial hack into the retailer’s systems took place in April through “sophisticated impersonation” involving a third party.
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Disruption is expected to continue at the retailer until the end of this month.
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Mickey Carroll in May answered why M&S cyber attack was so bad.
The Co-op and Harrods were also subsequently targeted by hackers.
Paul Foster, head of the NCA’s National cybercrime unit described the arrests as a “significant step” in their investigation, which remains “one of the Agency’s highest priorities”.
He added: “…our work continues, alongside partners in the UK and overseas, to ensure those responsible are identified and brought to justice.”
The National Crime Agency is keen to “signal” to “future victims” the “importance of seeking support and engaging with law enforcement”, stating that “the NCA and policing are here to help”.
The NCA has also thanked M&S, Co-op and Harrods for their support in their investigations.
The arrests, which took place early on Thursday morning, were supported by officers from the West Midlands Regional Organised Crime Unit and the East Midlands Special Operations Unit.
Earlier this week, the chairman of M&S told MPs that the hack had been “traumatic” and like an “out-of-body experience”.
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Archie Norman, however, refused to be drawn on whether the retailer had paid any ransom.
“We are not discussing any of the details of our interaction with the threat actor, including this subject, but that subject is fully shared with the NCA,” he said.
A New York-listed company with a valuation of more than $21bn is to snap up Space NK, the British high street beauty chain.
Sky News has learnt that Ulta Beauty, which operates close to 1,500 stores, is on the verge of a deal to buy Space NK from existing owner Manzanita Capital.
Ulta Beauty is understood to have registered an acquisition vehicle at Companies House in recent weeks.
Royal Mail had repeatedly failed to meet the so-called universal service obligation to deliver post within set periods of time.
Those delivery targets are now being revised downwards.
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Rather than having to have 93% of first-class mail delivered the next day, 90% will be legally allowed.
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The sale of Royal Mail was approved in December
The target for second-class mail deliveries will be lowered from 98.5% to arrive within three working days to 95%.
A review of stamp prices has also been announced by Ofcom amid concerns over affordability, with a consultation set to be launched next year.
It’s good news for Royal Mail and its new owner, the Czech billionaire Daniel Kretinsky. Ofcom estimates the changes will bring savings of between £250m and £425m.
A welcome change?
Unsurprisingly, the company welcomed the announcement.
“It is good news for customers across the UK as it supports the delivery of a reliable, efficient and financially sustainable universal service,” said Martin Seidenberg, the group chief executive of Royal Mail’s parent company, International Distribution Services.
“It follows extensive consultation with thousands of people and businesses to ensure that the postal service better reflects their needs and the realities of how customers send and receive mail today.”
Citizens Advice, however, doubted whether services would improve as a result of the changes.
“Today, Ofcom missed a major opportunity to bring about meaningful change,” said Tom MacInnes, the director of policy at Citizens Advice.
“Pushing ahead with plans to slash services and relax delivery targets in the name of savings won’t automatically make letter deliveries more reliable or improve standards.”
Acknowledging long delays “where letters have taken weeks to arrive”, Ofcom said it set Royal Mail new enforceable targets so 99% of mail has to be delivered no more than two days late.
Changing habits
Less than a third of letters are sent now than 20 years ago, and it is forecast to fall to about a fifth of the letters previously sent.
According to Ofcom research, people want reliability and affordability more than speedy delivery.
Royal Mail has been loss-making in recent years as revenues fell.
In response to Ofcom’s changes, a government spokesperson said: “The public expects a well-run postal service, with letters arriving on time across the country without it costing the earth. With the way people use postal services having changed, it’s right the regulator has looked at this.
“We now need Royal Mail to work with unions and posties to deliver a service that people expect, and this includes maintaining the principle of one price to send a letter anywhere in the UK”.
Ofcom said it has told Royal Mail to hold regular meetings with consumer bodies and industry groups to hear their experiences implementing the changes.