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DP World has shelved an announcement to inject £1bn of cash into London’s main port on the eve of the UK’s international investment summit, as a spat erupts between ministers over who should be responsible.
The Dubai-based company, which owns P&O Ferries, was criticized earlier this week by British Transport Secretary Louise Hague, citing the company’s decision to lay off and rehire 800 workers two years ago. He called them “cowboy managers.”
The Labor government has banned the practice as part of a review of employment laws included in the Labor Rights Bill published this week.
DP World is finalizing plans to invest £1bn in the London Gateway container port in Essex, sources said.
The project is likely to still go ahead, but people close to the company say it is unlikely to be announced as part of an international investment summit hosted by British Prime Minister Sir Keir Starmer on Monday.
Reports that DP World had delayed the announcement early on Friday in response to Mr Haig’s comments sparked political criticism and sparked a rift at the highest levels of government.
Within hours, Downing Street distanced itself from the Transport Secretary’s words. “Louise Haig’s comments are her own personal views and do not represent the government’s views,” a No. 10 source said.
“We will continue to work closely with DP World, which has already made significant investments in London Gateway and Southampton ports, to support their contribution to the UK economy.”
Asked by the BBC whether Mr Hague was right to call P&O a rogue operator, Mr Starmer refused to back the transport secretary.
“Well, that’s not the government’s view,” he said. “What is important for me is to continue to focus on inward investment, because it is the jobs of the future that are important.”
But another Whitehall official said that calling P&O a “rogue employer” in a press release posted on the government’s website on Wednesday had been approved by Downing Street in advance.
“It’s the birds’ fault they didn’t see this from start to finish,” he said. “Various ministers have also used language over the past two years to describe P&O as a ‘rogue operator’. This is nothing new. ”
The Labor government’s investment summit on Monday aims to show the world that Britain is “open for business” and will include a range of announcements from other companies.
A Dubai-based executive said Number 10 was wise to distance itself from Mr Haig’s comments, but insisted DP World’s investment decisions were based on commercial realities rather than political excuses. did.
DP World was unable to finalize its internal review in time for the summit, the executive added.
The conglomerate’s chief executive, Sultan Ahmed bin Sulayem, still plans to attend Monday’s meeting, two people familiar with his plans said. Media reports early Friday suggested he intended to cancel the trip.
Another official said Downing Street’s decisive intervention would increase the likelihood that other representatives of the UAE’s biggest investors, such as sovereign wealth funds, would also attend the summit.
The debate highlights the tension between the government’s attempts to improve workers’ rights and its efforts to attract big business investment from around the world.
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Another industry executive close to DP World said the company still plans to invest in expansion, adding that development will be driven by business, not politics. However, it is currently unclear whether the group wants to announce this at the summit, the official added.
A UK government official said DP World was “commercially driven” and had “big plans” for investment in the UK. The person added that board oversight of the investment had been in the works for some time but did not respond to requests for comment.
DP World’s investment in the UK forms a major part of a major capital deployment into the country from the United Arab Emirates, which signed a £10bn strategic bilateral investment partnership in 2021. The company declined to comment.
The new government’s flagship event has already been criticized by businesses for its poor organization. The FT newspaper earlier reported that several CEOs scheduled to attend are unsure whether to visit.
