British Trade Secretary Jonathan Reynolds is meeting Saudi Arabian officials on Monday.
His trip comes ahead of the government’s International Investment Summit in October, where Prime Minister Keir Starmer will host 300 industry leaders “to boost investment in the UK.”
Reynolds wants to strike a trade deal with members of the Gulf Cooperation Council in Riyadh. Members of the bloc include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).
He will present the UK as ‘open for business’ and highlight the country’s expertise in technology, life sciences, creative industries, financial services and renewable energy.
“Economic growth is the driving force of this administration and boosting trade and investment with some of the world’s largest economies is critical to that,” Reynolds said.
Labour’s plans
The new Labour government inherited the weak economy of the Sunak government.
UK Chancellor of the Exchequer Rachel Reeves is under pressure to address a £22 billion deficit left by the Tories. The path to closing that gap is narrow, given manifest promises not to increase income tax and VAT.
The Resolution Foundation, a think tank focused on the living standards of low- and middle-income families, suggested in a recent report that Reeves could push through a round of tax rises without breaking his campaign promises. These would target inheritance and capital gains, shifting the burden onto those with “the broadest shoulders”, as Labour’s campaign promised.
The Boston Consulting Group also published an analysis of the situation. They suggested the government could save almost £20 billion by 2029 by bringing back 450,000 people who have dropped out of the workforce due to long-term illness since the pandemic. The measure could also boost the country’s GDP to £177 billion by 2029. However, it would likely face strong opposition given the country’s existing frustrations with the already overstretched NHS.
Foreign aid
The Gulf States already have several assets in the UK, although these have often come under scrutiny. Heavy involvement in national football clubs has sparked accusations of ‘sportswashing’.
Earlier this year, the British government blocked a bid by an Abu Dhabi-backed group to take over the Telegraph Media Group. The deal was criticized for its potential impact on freedom of expression, given the track record.
Football club Manchester City, owned by Abu Dhabi Sheikh Mansour bin Zayed Al Nayan, is currently facing 115 charges over alleged breaches of Premier League financial regulations.
Given this history, major investments from the Gulf will undoubtedly attract attention. However, given the government’s situation, they may feel they have no choice.
“UK Trade Secretary seeks investment from Gulf” was originally created and published by Investment monitora brand of GlobalData.
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