DP World Withdraws £1bn UK Investment Amid Cabinet Criticism, Casting Shadow Over No 10’s Investment Summit

Setback for Downing Street's investment summit as major port operator withdraws £1 billion declaration amid P&O dispute

The Dubai-based firm DP World is reevaluating its intentions after facing backlash from members of Sir Keir Starmer's team regarding its affiliate P&O Ferries.

Business reporter @pkelso

Friday, October 11, 2024, 3:

The Investment Summit hosted by the government faced a significant setback when the maritime and logistics powerhouse DP World withdrew a planned declaration of a £1 billion investment in the London Gateway container port. This decision came in the wake of critical remarks from members of Sir Keir Starmer's cabinet.

Sky News has learned that the investment from the Dubai-based firm was set to be a highlight of Monday's event, designed to display the UK's attractiveness to investors. The event will see the attendance of the prime minister and Chancellor Rachel Reeves.

The investment by DP World in the port is currently being reassessed after Transport Secretary Louise Haigh and Deputy Prime Minister Angela Rayner critiqued its affiliate, P&O Ferries.

In March 2022, P&O faced significant backlash after dismissing 800 British maritime employees and substituting them with less expensive, predominantly international staff, a decision the company claimed was necessary to avoid going under.

On Wednesday, Ms. Haigh unveiled new laws aimed at safeguarding maritime workers, labeling P&O a "rogue operator" and urging the public to shun the company.

In a joint statement with Ms. Rayner, Ms. Haigh referred to P&O's conduct as "a national disgrace," while Ms. Rayner called it "a blatant case of exploitation by an employer."

Ms. Haigh has openly condemned the actions of P&O before, but the intensity and timing of the ministers' remarks have compromised initiatives by the Department for Business and Trade to position the Investment Summit as a pivotal moment for both the government and the economy.

Numerous executives and financiers, featuring delegates from American private equity and global sovereign wealth funds, are set to convene in London's financial district. The gathering aims to attract substantial foreign investments to support the government's initiatives.

Downing Street views the event as an effort to rejuvenate Sir Keir's leadership, which has experienced a shaky initial 100 days plagued by controversies over his advisers and his acceptance of complimentary gifts.

The current misalignment among ministers has not only resulted in the temporary loss of a £1 billion investment in crucial UK infrastructure but has also once again raised questions about the efficiency of government functions.

It has been reported that the call to withdraw the announcement and reassess an investment, which has been under discussion for several months, was directly made by Sultan Ahmed bin Sulayem, the chairman of DP World.

He was scheduled to participate in the Investment Summit on Monday, but he will no longer be making the trip to London.

Explore further in business news: British economy experiences resurgence; U.S. national debt on track for record levels; Officials accused of hiding behind Post Office issues.

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Mr. Sulayem has consistently declined to issue an apology for the conduct of P&O, asserting that the abrupt dismissals were determined by regional managers and were crucial in maintaining the company's existence and the preservation of numerous positions.

The investment of £1 billion aimed to enhance the London Gateway facility by incorporating two additional berths to the existing four, along with a new rail terminal. This expansion was set to make it the largest port in the UK in terms of volume.

In 2023, DP World amassed worldwide earnings nearing £14 billion and has operations across over 60 nations. The company has invested £2 billion in the London Gateway and also manages the container port in Southampton.

A spokesperson from DP World informed Sky News that the investment is currently being evaluated.

In reaction to the report from Sky, opposition science spokesperson Andrew Griffith commented, "This only adds to the proof that Angela Rayner might hold multiple positions, yet her actions are resulting in job losses for others."

"It's understandable that reverting to union regulations reminiscent of the strike-prone 1970s makes the UK a less attractive option for investment. Investors are swayed not by fancy gatherings but by a stable and reasonable business environment."

Stay informed about the most recent developments in the UK and internationally by tuning into Sky News.

Prime Minister Sir Keir Starmer praised the upcoming summit during his response to Sky's report on Friday.

In response to inquiries about whether his cabinet members had deterred investments, he stated, "In the recent period of about four weeks, we've witnessed at least five or six major investments in the UK, totaling £24 billion just today.

A significant investment summit is scheduled for Monday in the UK, attracting top investors worldwide.

"This is extremely beneficial for the nation and the future of employment. It's exactly the type of transformation that is necessary."

Steve Rotheram, the Labour mayor for the Liverpool City Region, responded to the critique of P&O by stating that despite the UK's significant need for investment, he had "very little sympathy for a company that terminates its employees."

He informed Sky News, "You cannot simply dismiss and then reemploy people. There are safeguards in place for all workers in this nation."

A representative from the government expressed approval, noting: "We are pleased with P&O Ferries' pledge to adhere to our recent maritime laws for crew members.

"We persist in our close collaboration with DP World, which has made substantial investments in the London Gateway and Southampton ports, aiding in the support of the UK economy.

"The upcoming International Investment Summit, scheduled for next week, is set to gather hundreds of companies from around the world, demonstrating that Britain is actively seeking business partnerships."

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