Ministers plot Whitehall shake-up in inward investment drive

by Admin
October 5, 2024

Ministers are plotting a shake-up of Britain’s drive to attract inward investment days before a summit they will claim demonstrates the country is “open for business”.

Sky News has learnt that officials are drawing up plans to merge the Office for Investment – a joint venture between the Department for Business and Trade and Number 10 – with other units of Whitehall to establish a more powerful cross-government investment agency.

The proposals are expected to lead to an announcement at around the time of the International Investment Summit, which takes place in London a week on Monday.

It was unclear whether a new body would be formally created using the Office for Investment as its nucleus, although one official said the blueprint under recent discussion resembled an agency that could be called “InvestUK”.

The beefed-up agency will be designed to counter long-standing criticisms of Britain’s inward investment efforts, and will come just a fortnight before Rachel Reeves delivers her first budget as chancellor.

Her decisions on corporate and personal taxation on 30 October will be closely watched to see if they align with the pro-enterprise, pro-investment claims that ministers plan to make at the investment summit in nine days’ time.

This weekend, Sky News can reveal that three of Britain’s biggest high street banks – Barclays, HSBC and Lloyds Banking Group – have agreed to pay £175,000 each to be principal sponsors of the gathering, which will be attended by more than 150 business leaders and financiers from around the world.

The other major sponsors are to be M&G Investments, the FTSE-100 fund management group, Octopus Energy and TSL Projects, which constructs data centres, according to people close to the event.

None of the banks, M&G or Octopus Energy would comment, while TSL Projects did not respond to an enquiry.

Together with Sir Keir Starmer, the prime minister, and the chancellor, Jonathan Reynolds, the business secretary, wants the 14 October summit to herald tens of billions of pounds of investment in the UK economy.

In recent days, Whitehall officials have been reaching out to private sector bosses to solicit investment announcements which can be unveiled at the summit.

One said some of the headline sponsors of the event were likely to be among those which made announcements on the day.

A government spokesperson said: “The whole of government is focused on delivering growth and investment across the country.

“That’s why the International Investment Summit will make clear the UK is open for business.

“We are on track to deliver an ambitious programme with some of the most influential investors and business leaders set to attend representing the best of business across the globe.”

On Friday, the government announced more than £21bn of support to boost Britain’s carbon capture and storage industry, while major questions remain unanswered about the fate of the Chinese-owned steelworks in Scunthorpe and Harland & Wolff’s shipyards in Northern Ireland, England and Scotland.

Sky News revealed last month that Larry Fink, the chairman and CEO of BlackRock, the world’s largest asset manager, would be among those attending the summit.

This weekend, one official said other attendees were expected to include Ruth Porat, president and chief investment officer of Google’s parent, Alphabet, Frederic Arnault, chief executive of LVMH’s watches division; Thomas Burberl, CEO of the French insurer AXA; Bruce Flatt, CEO of the Canadian investment giant Brookfield; Abigail Johnson, CEO of Fidelity Investments; Mike Fries, CEO of Liberty Global; Rob Stringer, the boss of Sony Music; Stefano Domenicali, chief executive of Formula One motor racing’s parent company; and Nataran Chandrasekaran, CEO of Tata Group.

Among the British company bosses who are lined up to attend are board members of BAE Systems, Balfour Beatty, Centrica, GlaxoSmithKline, Legal & General, Vodafone and WPP Group.

Among the others who have agreed to come are Margherita della Valle, the Vodafone chief executive, Hemant Taneja, CEO of technology investor General Catalyst, and John Graham, who runs the Canada Pension Plan Investment Board, one of the world’s largest pension plans, Sky News understands.

Labour pledged in its general election manifesto to hold the summit within 100 days of coming to power – a target it will narrowly miss.

It also vowed to attract 300 business leaders and investors from around the world, with the eventual total expected to approach that number only when the UK public sector contingent is factored in.

One glaring absentee could be a new investment minister tasked with driving forward Britain’s inward investment agenda, although on Saturday one insider suggested there remained a chance that an appointment would take place ahead of the summit.

Mr Reynolds recently told the Financial Times that details of the government’s industrial strategy would be set out before the investment summit, with the appointment of a chair for its Industrial Strategy Council among the impending announcements.