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Rishi Sunak put a “low tax approach” at the centre of the UK’s pitch to international investors as he launched a charm offensive to court about 200 executives at a summit in London.
The UK prime minister on Monday unveiled nearly £30bn of investment pledges and memorandums of understanding with international groups, calling them a “vote of confidence” in the country.
Executives at the event held at Hampton Court Palace included JPMorgan’s Jamie Dimon; Blackstone’s Stephen Schwarzman and Yasir Al-Rumayyan, governor of Saudi Arabia’s Public Investment Fund.
Guests were greeted by buglers, a red carpet and a fleet of Aston Martin and McLaren sports cars as they arrived at the summit — the government’s latest attempt to attract business and secure foreign investment.
Sunak told investors that part of the UK’s attraction lay in his government’s “cutting taxes” along with the country’s record in innovation — stretching back to great scientific minds such as Sir Isaac Newton and Michael Faraday — and its skilled workforce.
The UK raised corporation tax from 19 to 25 per cent this year but last week made permanent a temporary measure that allows companies to reduce their tax bills by up to 25p for every £1 of investment in plant and machinery, in a move chancellor Jeremy Hunt described as the “biggest business tax cut in modern British history”.
The ruling Conservatives have at times endured a fraught relationship with business over the way Brexit was implemented and more recently over U-turns on some of the government’s net zero targets.
Companies wanted “clear policies” HSBC’s UK boss Ian Stuart told the Financial Times, adding that the event had shown Britain in a positive light. “You want to be able to look forward and know how government is going to work rather than second guessing it.”
Investors said stability and planning systems were important factors in whether they did business in the UK.
Ignacio Galán, executive chair of Spain’s Iberdrola, owner of Scottish Power, said in an interview that the UK needed to improve its electric grid and cut the time taken to get projects up and running. Both the Tory government and Labour opposition have pledged to speed up planning processes.
Blackstone’s Schwarzman said it was “a real achievement” for the UK to have halved inflation from its 11.1 per cent peak in October 2022. Inflation stood at 4.6 per cent in October 2023 but was still well above the Bank of England’s 2 per cent target.
Before the summit, about 35 executives had attended a separate breakfast event with opposition leader Sir Keir Starmer at EY’s London headquarters. Some attendees then travelled to the government’s summit.
The Labour event, which was attended by shadow chancellor Rachel Reeves and shadow ministers Jonathan Reynolds and Darren Jones as well as executives from Barclays, Blackstone, BP, Citi and Toyota, underlined business’s desire to maintain relations with both of the UK’s largest political parties.
Labour, which is leading the Tories by 20 points in the opinion polls ahead of a general election expected next year, said the discussion covered “barriers to investment in the UK” such as planning, electric grid connections and “instability in the corporate tax regime”.
Asked about the push for close relations with China during the premiership of new foreign secretary Lord David Cameron, Sunak replied: “China today is not the China that he dealt with over a decade ago. It has changed; it’s right that our strategy evolves to take account of that.”
Sunak added that China “is an indisputable fact of global economic life” and that tackling challenges such as climate change would require engagement with Beijing.
Sunak told delegates that “the economic geography of the world is changing and so, for a country like the UK, it’s important that we reorient ourselves to places like the Middle East [and] Asia-Pacific.”
Al-Rumayyan and Khaldoon Al Mubarak, boss of Emirati sovereign wealth fund Mubadala Investment Company, praised the UK’s strong rule of law, its universities and life sciences sector as attractions to investors.
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