This investment summit is a triumph of style over substance

Pretending that existing projects are somehow shiny and new won’t rub with investors

The mini squabble between the Government and P&O Ferries owner, DP World, in recent days has made one thing perfectly clear: the numbers announced at this week’s international investment summit should be taken with a passenger boatload of salt.
At one point it looked like DP World was going to pull out of the summit – where it is expected to announce a £1bn investment – after Louise Haigh, the Transport Secretary, urged consumers to boycott the company.
Ruffled Middle Eastern feathers were only smoothed when Sir Keir Starmer slapped down Haigh for saying DP World was a “cowboy operator” for firing and rehiring 800 employees to save money.
The Prime Minister said Haigh’s comments didn’t reflect the views of the Government. This somewhat suggested that controversial fire-and-rehire tactics were just fine by him – which is presumably not what he meant.
But throughout the spat, no one can really have believed the investment DP World is planning to make in London Gateway port in Essex was seriously under threat.
The original report on Friday merely suggested that the port operator “could delay” its investment pledge and that the company’s chairman, Sultan Ahmed bin Sulayem, might not attend the event.
The whole brouhaha has reinforced my scepticism about these kinds of announcements regardless of who is making them. They are almost always a triumph of presentation over substance that involves wrapping up projects that have already been announced with those that were going to happen anyway, tying it all together with a bow and pretending it’s shiny and new.
Sure enough, dig a little deeper into the figure of £50bn in investment pledges due to be made on Monday and you will find that it includes £24bn of green investment unveiled last week.
What’s more, a good chunk of the money unveiled last week included projects that had already been announced. It’s hard to know whether some of this stuff is being double, triple or even quadruple counted.
The impressive-sounding number apparently also includes a £20bn investment from Australia’s Macquarie group, which will go towards building an electric car-charging network and offshore wind projects.
That certainly rings a bell. Back in March 2022, then prime minister Boris Johnson proudly announced that leading Australian businesses were pledging new investments totalling £28.5bn in projects across the UK.
Johnson claimed this demonstrated that Australia’s leading businesses recognised the opportunities “in our dynamic and forward-looking economy”. In a nod to Brexit, he claimed this was “global Britain in action”, suggesting that such investment wouldn’t have been possible when the UK was still part of the European Union.
The “fantastic schemes” announced that day would, Johnson claimed, “turbocharge the Government’s efforts to create jobs and growth in every part of the country and put the UK at the cutting edge of the green industrial revolution”. The main commitment was Macquarie’s pledge to invest £12bn by 2030, including in offshore wind in Lincolnshire and north Scotland.
Sound familiar?
This is, of course, the same Macquarie that got dubbed the “Vampire Kangaroo” for its reputation of taking over UK infrastructure assets, loading themselves with debt and gorging itself on the dividends. 
The announcement pointed out that the Aussie firm had invested £50bn in the last 15 years. But my issue with the announcement was less ideological than it was mathematical. 
Anyone capable of dividing 50 by 15 and 12 by eight (which might even include a few business journalists) could have spotted the problem. Johnson appeared to be announcing that Macquarie was planning to halve the rate at which it was investing in the UK from £3.3bn a year to just £1.5bn (even before you take inflation into account).
Taken at face value, that sounded like bad news not good; evidence of an international investor’s scepticism in the growth prospects of the UK rather than a ringing endorsement of the country’s potential. But the broader point is, of course, you shouldn’t take such announcements at face value.
They’re nonsense. The reality was that Macquarie might have invested more than it originally announced and might have invested less. No one would check. Macquarie invests in stuff if there’s stuff that’s worth investing in.
What businesses really need from this Government is a period of stability and an end to the endless speculation about the conditions under which they will operate in the future. That’s why this summit has struggled even to deliver on the presentation side of things.
The start time and the venue were only confirmed five days ago. Executives have expressed frustration over the lack of detail about the agenda. Those seeking clarity apparently received out-of-office replies from organisers just last week. An email sent to delegates in recent days also inadvertently contained the email addresses of over 100 invitees.
This has all added to a strong suspicion that the event was rushed in order to fulfil a pre-election pledge to hold it within 100 days of Labour taking power. The Government didn’t even have an investment minister until last Thursday – when Darktrace co-founder Poppy Gustafsson was finally appointed.
Also, attendees would be well within their rights to question the point of a summit that is supposed to trumpet the UK as an appealing destination for investment before the Chancellor sets out her economic plan in the Budget on Oct 30.
The blizzard of kites that have been flown about the contents of that plan relate to a whole host of issues – from workers’ rights to employer contributions to National Insurance – which will have profound implications for the returns that investors can expect to earn on their investments.
There will be question marks hanging over those issues until the end of the month at the very earliest. In the circumstances, holding the investment summit before the Budget is a little like putting your shoes on before your trousers. And that sounds like a good way to trip yourself up.