In a bid to reshape the UK’s economic landscape, Prime Minister Sir Keir Starmer addressed a gathering of over 200 executives at the historic Guildhall in London on Monday. Despite torrential rain outside, Starmer sought to present a compelling vision for the UK as an attractive investment destination, aiming to restore its status as “an open, outward-looking” nation.
During the investment summit, Starmer committed to dismantling bureaucratic obstacles that impede investment and economic growth. His message resonated positively among attendees, particularly after years of political turmoil under Conservative leadership. However, some business leaders remained cautious, preferring to wait for the details of Labour’s first Budget, which is set to be unveiled in two weeks.
Starmer’s speech was well-received, with Sir Nicholas Lyons, chair of the FTSE 100 pensions group Phoenix, stating, “He provided a compelling rationale for investing in the UK.” Yet, he acknowledged that “the proof of the pudding is in the eating,” highlighting the importance of tangible outcomes from the government’s promises.
The summit represented Labour’s opportunity to articulate its economic strategy to international investors. Central to Starmer’s approach is the goal of stimulating economic growth, particularly as he faces fiscal constraints that limit spending capabilities. The day’s discussions reflected a tension between the government’s pro-business rhetoric and its impending budgetary limitations. Starmer promised a “shock and awe” investment initiative, while his Chancellor, Rachel Reeves, hinted at forthcoming increases in business taxes in the upcoming Budget.
Among the attendees was former England football manager Gareth Southgate, who engaged with business leaders on the significance of the summit. One official noted that investors were keen to gauge Labour’s commitment to a pro-business stance, with some expressing skepticism about the necessity of holding an annual summit when similar events had been hosted by the previous Conservative government just months earlier.
Markus Krebber, CEO of German energy firm RWE, acknowledged the importance of such events in light of the new government. He stated that if Starmer could streamline bureaucratic processes and reduce planning delays, RWE would be more inclined to expedite investments in the UK.
Starmer, who currently enjoys a strong parliamentary majority and has a five-year window before facing re-election, aimed to reassure investors that the political instability of recent years was behind them. Among the business leaders attending was John Caudwell, the billionaire founder of Phones 4U, who expressed optimism about the government’s direction, saying the summit demonstrated that the administration was “definitely on the right trajectory.”
During the summit, ministers touted £63 billion in private sector investment pledges, much of which had already been announced. However, some executives urged caution, stressing that the next 100 days would be critical for Starmer’s government. One executive pointed out, “To achieve success by the end of your first term, you must make significant progress early on.”
Concerns about potential tax increases also loomed large. One private equity executive remarked that the summit “went fine,” but emphasized the importance of Reeves’s decisions regarding capital gains tax and tax implications for wealthy foreigners living in the UK, both of which would be clarified in the forthcoming Budget. “It’s positive, but it’s akin to saying California is open for business. What will the actual policies be?” they questioned.
Another attendee from an Abu Dhabi investment fund indicated a cautious approach, describing a “waiting pattern” for new investments into the UK amid perceived sluggishness from the new government in reigniting deal-making activity.
The lead-up to the summit revealed underlying tensions within Starmer’s administration, particularly in balancing pro-business outreach with Labour’s traditional pro-worker stance. A controversy erupted when Transport Secretary Louise Haigh suggested boycotting DP World, the Dubai-based operator of P&O Ferries, following the company’s controversial mass layoffs in 2022. This incident coincided with Labour’s announcement of a new package of worker rights. Starmer swiftly distanced himself from Haigh’s comments, and DP World proceeded with its £1 billion investment in an Essex port, which was also part of the summit agenda.
As the event unfolded, Starmer engaged in a discussion on artificial intelligence with former Google CEO Eric Schmidt, set against the backdrop of the Guildhall’s stunning 15th-century architecture. The day culminated in an evening reception at St Paul’s Cathedral, where King Charles attended. Sir Elton John made a special appearance, performing for guests while a dinner prepared by three-star Michelin chef Clare Smith added a touch of elegance to the proceedings. One chief executive remarked, “It sounds like a religious experience,” encapsulating the event’s unique blend of business and culture.
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