UPDATE: UK PM Sunak rolls out red carpet for investors in growth push

(Alliance News) - Prime Minister Rishi Sunak said there was "positive momentum" behind the UK ...

Alliance News 27 November, 2023 | 10:38AM
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(Alliance News) - Prime Minister Rishi Sunak said there was "positive momentum" behind the UK economy as the government rolled out the red carpet for investors.

The Global Investment Summit at Hampton Court Palace comes after Chancellor Jeremy Hunt offered tax breaks to firms to encourage investment in his autumn statement.

But Sunak faced questions about whether the government's financial plans will also usher in a new era of austerity, with public spending facing a prolonged squeeze.

Scores of chief executives including Stephen Schwarzman from Blackstone Inc, Amanda Blanc at Aviva PLC, David Solomon from Goldman Sachs Group Inc and Jamie Dimon at JPMorgan Chase & Co were attending the gathering, aimed at attracting financial support for UK projects.

Before the summit, the government said a total of GBP29.5 billion had been committed by investors, triple the sum raised at the last global investment gathering in 2021.

Sunak said: "My singular focus is driving growth and creating jobs across the UK. So I'm delighted that we've secured investments worth around GBP30 billion, three times the amount that was secured the last time this summit was held a little while ago.

"And that comes on the back of a very positive autumn statement where we cut taxes for those businesses that are investing in our future growth and also the great announcements from Nissan last week, securing the future of that plant in Sunderland, building three new lines of the next generation of electric vehicles.

"So very positive momentum behind the UK economy."

Australia's IFM Investors will sign a memorandum of understanding with the Department for Business & Trade with the intention of investing GBP10 billion over the next four years for large-scale infrastructure and energy projects.

BioNTech, which developed the mRNA-based Covid vaccine with Pfizer Inc, has committed to a new lab in Cambridge, as well as a centre of expertise for artificial intelligence in London.

Ministers also announced plans for a new expert panel to look into how to best create a UK corporate re-domiciliation regime to make it easier for foreign firms to move here.

The government has hailed the opportunities for thousands of jobs to be created as a result of the new investments.

A reception will also take place at Buckingham Palace, hosted by the King, in a sign of the attention being lavished on the chief executives.

Business Secretary Kemi Badenoch said the UK economy is "doing well despite significant headwinds".

She told Sky News: "We are dealing with the same problems that many other countries around the world are dealing with.

"Investors who I hosted at a reception yesterday were telling me about the concerns they have in the US, in France and so on."

The focus on economic growth comes after an autumn statement where the Office for Budget Responsibility downgraded the forecasts for the coming years.

The autumn statement also prompted warnings from economists that plans for a tight public finance settlement would not be delivered.

The prime minister rejected warnings from economists that his fiscal plans will result in painful and "implausible" savings for already-squeezed departments and public services beyond the next general election.

Speaking to Bloomberg TV on the eve of the investment summit, Sunak rebuffed a suggestion that he will be presiding over austerity as "simply not the case".

"Actually, government spending in the UK right now is at very high levels historically over this parliament.

"It's grown at very high levels, even in real terms, after the impact of inflation. So I think any commentary or accusations that that's what's happening is just simply unfounded.

"And we're at a point now, given how people are feeling, given the amount that's being spent, where I think the priority has got to be lowering the tax burden.

"Government's already spending a lot of people's money and what we need to see going forward is more productivity out of the public sector, needs to match what we've seen in the private sector post-Covid.

"And I'd rather focus on efficiency in the public sector and prioritise cutting people's taxes, rather than the government spending ever more of their money."

Despite the earnings bonus, millions of workers will face a squeeze on their finances with the tax burden still set to reach a record high.

The continuing freeze of personal tax thresholds will wipe out the benefit of the national insurance reductions for many workers, as higher earnings see millions pulled into paying more to the Exchequer through "fiscal drag".

Sunak has already faced calls from some MPs, many worried about losing their seats at the next election, to go further on tax cuts.

The prime minister refused to speculate on what could follow but said the autumn statement was the "start of a journey".

source: PA

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Aviva PLC 447.70 GBX 0.31
The Goldman Sachs Group Inc 388.10 USD -0.24
JPMorgan Chase & Co 185.29 USD -0.41
Pfizer Inc 26.59 USD 0.11

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