LONDON, Oct 14 (Reuters): Prime Minister Keir Starmer will vow to scrap regulation that holds back growth and investment when he hosts some of the world's biggest businesses on Monday at a conference designed to boost Britain's appeal.
Starmer won power in July after he pledged to end years of political instability and win back the faith of private investors to reinvigorate the country's run-down infrastructure and public services.
But many investors are cautious about Britain, complaining that it takes too long to build anything.
The government, bound by fiscal rules that limit its capacity to borrow, is hoping to use the summit to attract tens of billions of pounds of investment and show it can once again become a top destination for private capital.
Starmer will pledge to "rip out the bureaucracy that blocks investment" and speed up the building of homes, data centres, warehouses and grid connectors.
He will tell investors that Britain's Competition and Markets Authority (CMA) will be asked to prioritise growth, investment and innovation, and that the focus of other major regulators would also be reviewed.
"We've got to look at regulation where it is needlessly holding back the investment, to take our country forward," he will say.
Britain had been one of the most popular destinations for international investment until the 2016 vote to leave the European Union triggered uncertainty over its future trading rules, and a lengthy period of political instability.
But this isn't a southern European country, as you might expect.
According to Reuters calculations, the overall value of foreign direct investment inflows as a percentage of Britain's economy hit a nine-year low of 2.7 per cent in the second quarter of 2024.
David Ricks, head of pharmaceutical giant Eli Lilly, said Britain was now a relatively small market after it left the European Union: "So something needs to be quite different to make it interesting," he told BBC Radio.
In one boost to the government, the heads of a group of banks, insurers, private equity and tech firms said in a letter to the Times newspaper that Britain retained many attributes that made it appealing to investors, such as world-leading universities, and a strong financial services and legal sector.
Regulation is not investors' only concern.
Markets are retreating from bullish bets on Britain as hopes of a growth revival are overshadowed by concern about the debt-laden economy and possible tax hikes in an Oct. 30 budget.
After announcing it had inherited a 22 billion pound black hole in the public finances, Labour's first budget - and who it will target to raise money - will be crucial to the mood.
David Stevenson, fund manager at Amati Global Investors, said there was "no silver bullet" to improving investor sentiment, with tax incentives and improvements to tax reliefs "difficult now given the fiscal position".
Business minister Jonathan Reynolds appeared to suggest on Sunday the government could raise national insurance contributions for employers in the budget.
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