The UK government has promised to put an end to regulatory practices that are “needlessly holding back investment” in the country. Prime Minister Keir Starmer told an International Investment Summit in London on Monday he would pave the way for foreign investors to come and invest in Britain by “ripping up bureaucracy.”

The government hopes that the Summit will bring with it billions in foreign investment. Sectors such as AI, life sciences and infrastructure are said to be the main areas of potential future investment.

According to a government press release: “Securing investment is central to the government’s mission to deliver economic growth which will create jobs, improve living standards, and make communities and families across the country better off.”

And there were some early positive signs too. Donna Deegan, the mayor of Jacksonville in Florida, was one of the many foreign participants. She told Sky News: “The message overall is a good one. Any reform to regulation that boosts investment is positive. But he (PM Keir Starmer) has to deliver on that message now”.

But there is also scepticism. Only last week the government published the UK Employment Rights Bill, which left some experts concerned about the country’s ability to attract foreign investment. The government has tried to dismiss those concerns by saying the Bill will actually help businesses grow.

Purpose behind the Summit

The PM was speaking to a hall filled with CEOs and investors from around the world at London’s Guildhall, the historical heart of the City surrounded by banks and business firms. His message was clear. “You have to grow your business, I have to grow my country,” he said.

The core purpose behind this Summit, the first of its kind organised by a UK government, was to tell international investors that Britain is a good place to invest their money and launch their businesses.

There is an argument that, over the past decade, global investors have skipped Britain in favour of other destinations where they found it easier to invest and operate. The UK’s tough regulatory practices are said to be one reason behind this. The current UK government says it wants to change that narrative.

The Prime Minister told Monday’s Summit: “We will rip out the bureaucracy that blocks investment and we will make sure that every regulator in this country take growth as seriously as this room does.”

He went on to say: “We’ve got to look at regulation where it is needlessly holding back the investment, to take our country forward. Where it is stopping us building the homes, the data centres, warehouses, grid connectors, roads, trainlines, you name it then mark my words – we will get rid of it.”

“You have to grow your business, I have to grow my country.”

UK Prime Minister Keir Starmer

And for the Labour Party it’s also about realigning its own image as a government in order to appear more business and growth friendly to both internal and foreign investors. As Sky News’s political correspondent Rob Powell commented, the Labour Party, historically, has not been considered “a good bedfellow with the corporate world.”

Reforms at what cost?

A lot of the pressure around idea of softer regulation seems to be coming from outside. Former Google CEO Eric Schmidt told the PM during the Summit that delays to regulatory reforms were killing the UK. He said: “I think the business community would much rather have a single person who can say yes or no … and then they can move on.”

The head of US pharmaceutical firm Eli Lilly, David Ricks, was also in attendance. He told the BBC: “The difference in the UK is, separate from Europe, it’s a relatively small market for most multinationals and certainly for Americans, so something needs to be quite different to make it interesting.”

The government’s response, which seems to be mainly aimed at foreign investors such as those mentioned above, is very clear and firm. It seems ready and willing to remove any regulatory obstacles to growth and investment. The PM said he will rip them all up.

But internally there are concerns that the government is giving in to outside pressure. This was evident from the fact that Starmer chose to distance himself from comments made by Transport Secretary Louise Haigh recently about P&O Ferries.

Rogue operators

The firm had promised a £1 billion ($1.31 billion) investment in the London Gateway container port. But last week Haigh called the firm ‘rogue operators’ and asked people to boycott it. The comments were made in relation to the firm’s sacking of 800 of its UK employees in 2022 without consultation with unions.

Despite the damning comments, P&O Ferries’s owner DP World attended the Summit on Monday and also confirmed the investment plan would go ahead. But this was only after government intervention, with the PM saying Haigh’s comments did not represent the government’s official position.

Unions have also said the government cannot write blank cheques to corporations without securing guarantees that those corporations will in return protect UK jobs. Sharon Graham, the general secretary of Unite, made those comments in relation to the situation in Grangemouth, the Scottish oil refinery at risk of being shut down.

Some experts have also criticised the government for the lack of detail about what exactly it wants to do in terms of regulatory reforms’ Neil Robson, Financial Markets and Funds partner at Katten Muchin Rosenman LLP, said: “It is all well and good for the Prime Minister to pledge to ‘upgrade the regulatory regime’ and to ‘rip up’ bureaucracy, but we need detail. The last Government already took steps to upgrade the UK’s regulatory regime with the Edinburgh Reforms, but we have heard nothing about this since Labour took over.”