Setback for No 10’s Investment Summit as DP World Withdraws £1bn Port Expansion Plan Amid P&O Ferries Controversy

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

Following backlash from members of Sir Keir Starmer's team regarding its subsidiary P&O Ferries, Dubai's DP World reevaluates its strategy.

Business reporter @pkelso

Friday, October 11, 2024, 3:

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

Sources indicate that the investment from the Dubai-based firm was expected to be a highlight of Monday's event, designed to display the UK's attractiveness to investors, with both the Prime Minister and Chancellor Rachel Reeves in attendance.

The decision by DP World to invest in the port is currently being reassessed after Transport Secretary Louise Haigh and Deputy Prime Minister Angela Rayner raised concerns about its affiliate, P&O Ferries.

In March 2022, P&O sparked significant backlash after they dismissed 800 British crew members, opting instead for less expensive, predominantly international staff, claiming this step was essential to avoid company bankruptcy.

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

In a joint press statement with Ms. Rayner, Ms. Haigh labeled P&O's conduct as "a national disgrace," while Ms. Rayner characterized it as "a blatant case of employer exploitation."

Ms. Haigh has expressed disapproval of P&O's conduct in the past, but the intensity and timing of the ministers' statements compromised the Department for Business and Trade's attempt to position the Investment Summit as a pivotal moment for both the government and the economy.

Numerous top executives and financiers, featuring delegates from American private equity and global sovereign funds, are set to converge in London's financial district. This gathering is part of the government's effort to attract substantial foreign capital to finance its initiatives.

Downing Street views the event as an opportunity to rejuvenate Sir Keir's leadership following a challenging initial 100 days marked by controversies over his advisers and his acceptance of complimentary gifts.

The UK will temporarily miss out on a £1 billion investment in crucial strategic infrastructure, highlighting once more the perceived disarray among ministers and raising questions about the efficiency of governmental management.

It has been confirmed that the decision to delay the announcement and reassess a long-negotiated investment was personally made by DP World's chairman, Sultan Ahmed bin Sulayem.

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

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Mr. Sulayem has previously declined to issue an apology for the actions taken by P&O, attributing the abrupt dismissals to decisions made by the local management team. He argues that these actions were necessary to save the company and preserve thousands of other jobs.

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

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

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

Reacting to the report from Sky, opposition science spokesperson Andrew Griffith commented: "This just shows that although Angela Rayner holds dual roles, 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 less attractive for investment. It's not the fancy gatherings that attract investors, but rather a stable and reasonable business climate."

Stay updated on the most recent happenings from the UK and globally by tuning into Sky News.

When questioned about Sky's report on Friday, Prime Minister Sir Keir Starmer praised the upcoming summit scheduled for next week.

In response to a question about whether his cabinet members had caused the country to lose investments, he said, "In what I believe to be the last four weeks alone, we've seen at least five or six major investments in the UK, one of which was £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 kind of transformation that is required."

Steve Rotheram, the Labour mayor of the Liverpool City Region, responded to the criticism of P&O, stating that despite the UK's need for "as much investment as possible," he had "very little sympathy for a company that dismisses its employees."

"You can't simply dismiss and then rehire," he stated to Sky News. "You cannot just terminate employees – there are safeguards in place for everyone in this nation."

A spokesperson for the government expressed approval, stating: "We are pleased with P&O Ferries’ decision to adhere to our latest maritime laws for seafarers.

"We maintain strong collaboration with DP World, which has significantly invested in the London Gateway and Southampton ports, to support the UK economy."

"Upcoming International Investment Summit will gather numerous worldwide companies, showcasing Britain's readiness for business opportunities."

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