Corporation tax capped at 25% for rest of parliament, says chancellor

Sir Keir Starmer will pledge to get rid of regulation that “needlessly holds back investment” at Labour’s investment summit today.
The government is expected to announce investment deals worth billions in AI, life sciences and infrastructure at the conference.
A row over criticism of P&O Ferries that jeopardised a £1 billion investment by its Dubai-based owner, DP World, has been smoothed over, with the company confirming the deal on Monday morning.
A raft of new, highly-skilled jobs — including in Scotland and Wales — will be created thanks to the £60 billion of investment into the UK, the chancellor said.
“The decisions that lie ahead will not always be easy, but by making the right choices — to grow our economy [and] drive investment — we will create good jobs and new opportunities across every part of our country,” Rachel Reeves said during her keynote speech at the conclusion of the investment summit on Monday.
Rachel Reeves has confirmed that more than “£60 billion of shovel-ready investments” during her closing speech at the government’s investment summit in London.
The government will “turbocharge” the UK Infrastructure Bank by converting it into a new National Wealth Fund, the chancellor has announced.
Rachel Reeves told the International Investment Summit: “Today, we are creating the National Fund and making it the UK’s new impact investor.”
The National Wealth Fund will facilitate tens of billions of pounds of private investment into clean energy and our growth industries, such as green hydrogen, carbon capture and storage, and gigafactories.
“From today, we are turbocharging the UK Infrastructure Bank, which will operate as our National Wealth Fund. It will be headquartered in Leeds with a bigger team, more freedom and an expanded suite of financial instruments and more economic risk capital to ensure that the National Wealth Fund’s investments can be even more catalytic,” she added.
The government will cap corporation tax at 25 per cent for the rest of the parliament, Rachel Reeves has announced.
The chancellor told guests at the International Investment Summit that the government would “create a tax system that supports wealth creation and increases business investment”.
She said: “I know that providing certainty is right at the heart of that. The constant changes that we have seen in corporation tax in recent years have caused instability.
“So at the budget, this government will be outlining a corporate tax roadmap. We will cap the rate of corporation tax at 25 per cent, the lowest in the G7, for the duration of this parliament.
“We will maintain a world-leading capital allowances offer, with full expensing, and the £1 million annual investment allowance; and we will maintain the current rates for the research and development reliefs which provide generous support for innovation.”
“Britain is open for business once again,” the chancellor has declared during her closing keynote address to delegates at the investment summit.
British economic instability has ended and the new government is bringing investment and jobs back to Britain, added Rachel Reeves.
She said: “Today, at this summit, we are sending a message for all to hear.
“We are ending years of instability and uncertainty. We are bringing investment and jobs back to this country. Britain is open for business once again.”
Given the rampant speculation over which taxes will be raised in her first budget on October 30, she maintained that the government faced “difficult choices” due to the economic situation it inherited from the Conservatives.
“Balancing the books by ensuring we do not borrow for day-to-day spending is not anti-investment. It’s the only way to ensure government and business can invest with confidence,” she said.
Rumours about a potential spike in capital gains tax — as high as 39 per cent — are “wide of the mark”, said the prime minister.
Sir Keir Starmer was reacting to a question about the pre-budget speculation during a television interview with Bloomberg at the investment summit.
Bloomberg reported that Starmer’s comment “appeared to be an attempt to calm businesses and investors ahead of the Oct 30 budget. Usually the premier does not comment on which measures chancellor of the exchequer Rachel Reeves is considering”.
Sir Keir Starmer’s bid to tear down regulation that “needlessly holds back investment” in the UK would not result in corners being cut, the culture secretary Lisa Nandy said.
She told Sky News: “No, absolutely not. The prime minister was very clear this morning that regulation can save lives.”
The changes were being brought in to help “partner with business and investors”, to “remove those unnecessary hurdles” that “get in the way of creating good jobs and growth across every part of our country”, Nandy said.
The chief executive of the US pharmaceutical giant Eli Lilly has welcomed plans to slash bureaucratic red tape that has been blocking growth.
Following the firm’s announcement that it will provide £279 million to fund trials in the UK to help tackle the obesity crisis, David Ricks told the BBC the country had to change course post-Brexit.
“I think 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,” he said.
The former Google chief executive Eric Schmidt was being “absolutely fair” when he warned the prime minister that problems with the planning regime and regulation are “killing you”, said the business secretary.
“I think the point about our present system is it doesn’t give anyone at present what I think they want,” Jonathan Reynolds said.
Earlier Schmidt told Sir Keir Starmer, “the cost of capital and the delay is killing you”, during a panel discussion.
Reynolds said: “When you look at some of these big infrastructure projects, and there’s many we could cite as either never happening or happening after a long period of time, I think it’s always been a problem in the last few years.”
Reports that DP World would pull out of the government’s investment summit on Monday were dismissed as a mere blip by the business secretary Jonathan Reynolds.
He added that “when you get some bumps in the road, you get on the phone and you sort it out”.
Reynolds also told reporters that “we do believe and always will do that what happened with the … previous workforce of P&O Ferries was wrong”.
“We don’t support fire and rehire,” he said, referring to the incident when P&O Ferries sacked 800 employees without notice and replaced them with foreign agency workers. Reynolds added: “The problem under the last government was that it was lawful what happened and we will change the law.
“It will not be possible to do that under this new government. And where people can accept that position we can work with them, and of course we’ll work with people who can bring that kind of constructive investment to the UK.”
A telecoms billionaire has said Labour’s approach to business is the best “since Maggie Thatcher” as he praised the sounds coming out of the government.
John Caudwell, a former Tory donor who backed Labour at the election, said he was “awestruck” by Sir Keir Starmer’s pro-business outlook.
Speaking to Times Radio, the founder of Phones 4u said: “I would have to say that I’ve not witnessed such an environment of adventurous thinking and commitment to business since Maggie Thatcher.
“I’m almost awestruck by the complete dedication of the whole Labour Party from top to bottom to encourage business, to encourage innovation, to deregulate and to just drive forward the process of making Britain strong.
“I just hope they can do what they say they’re going to do because if they do, then we’re on for a really good trajectory in the next few years.”
Four US tech firms have announced plans to invest £6.3 billion in data-centre infrastructure in the UK — a move the technology secretary has called a “vote of confidence” in the country.
The announcement was made during the government’s International Investment Summit on Monday.
The four firms — CyrusOne, ServiceNow, CloudHQ and CoreWeave — have announced ranging investments including plans to build new data centres and office space, as global demand continues to grow for computing capabilities to power artificial intelligence.
The investment plans include CloudHQ’s development of a new £1.9 billion data centre in Didcot, Oxfordshire, which it said would create 1,500 jobs during construction and 100 permanent jobs once fully operational.
Sir Elton John is to perform at the government’s investment summit in central London as Sir Keir Starmer seeks to attract business to the UK.
The Rocket Man singer will play an exclusive concert for about 300 business leaders at St Paul’s Cathedral this evening. Also present at the reception event will be King Charles and most of the senior cabinet ministers.
Britain’s top five banks can support the government in achieving growth and greater prosperity if they are shielded from further regulations, their bosses have said.
Before the government’s International Investment Summit today, the leaders of HSBC, Lloyds, Santander, NatWest and Barclays called for greater regulatory “stability and predictability” for the banking industry. This, they said, would help to provide “the certainty and resilience for banks to support growth”.
In a rare joint opinion piece for The Times, the banking leaders also put pressure on regulators to deliver on their objectives set out by the previous government.
• Read the full story here
Sir Keir Starmer has “full confidence” in Louise Haigh, Downing Street said on Monday days after the prime minister disowned his transport secretary’s remarks criticising P&O.
Asked whether Starmer had full confidence in the minister, his official spokesman said: “Yes, absolutely. The transport secretary in the run-up to the summit delivered significant investment in electric buses. She’s put an end to industrial disruption seen for the past two and a half years that has cost the economy and commuters dearly, and she’s been driving forward reform and bringing rail services back into public ownership.”
Haigh, who is attending the investment summit, jeopardised a £1 billion investment in the UK after referring to P&O as a “rogue operator” and said consumers should boycott the company.
Nearly £300 million will be invested in research on a weight-loss jab under a new partnership between the government and Eli Lilly, the world’s largest pharmaceutical firm.
The American pharmaceutical giant has announced that it will provide £279 million to fund trials in the UK looking at ways to tackle the obesity crisis. This will involve a five-year trial in Manchester testing the weight-loss jab Mounjaro, or tirzepatide, which is the main rival to Ozempic. The results of the trial will inform NHS plans to roll out weight-loss drugs.
Amanda Pritchard, chief executive of the NHS, said the deal with Eli Lilly was a “momentous agreement”. She added: “Obesity is one of the biggest public-health issues we face, and we know weight-loss drugs will be a game-changer, alongside earlier prevention strategies, in supporting many more people to lose weight and reduce their risk of killer conditions like diabetes, heart attack and stroke.”
The investment was finalised about about 18 months after the company initially suspended the funding, citing Britain’s “stifling commercial environment”.
At the time, Eli Lilly was among a number of multinational pharma companies lobbying the government to overhaul a soaring NHS sales levy on branded medicines. The health department and industry reached a compromise deal late last year.
Over the weekend, Sir Keir Starmer made clear that his commitments to boost workers’ rights would not get in the way of his desire to bring in cash from the owners of P&O (Chris Smyth writes). As ministers now trumpet a deal to upgrade Stansted airport, it seems that growth and jobs also trump concerns about emissions.
Louise Haigh, the transport secretary who prompted the row with DP World by calling P&O a “rogue operator”, praised the Stansted deal as a “clear signal that Britain is open for business”. She argued that Stansted could be upgraded “while also meeting our existing environment obligations”, with the airport promising a new solar farm to generate electricity. But environmentalists will be dismayed by the prospect of more plane journeys and associated emissions.
The deal also raises fresh questions about a third runway at Heathrow after years of dithering under the Conservatives. No 10 has previously said it is “not opposed” to expansion if it can meet tests on emissions, climate change, noise pollution — and growth.
Starmer has said he will not duck decisions because they are “too difficult”. A decision on Stansted offers a very clear test of that promise.
While many delegates were happy to linger and chat on their way to a networking break — including Andrew Bailey, governor of the Bank of England, and Sharon White, the outgoing boss of John Lewis Partnership — others were in a hurry.
Sultan Ahmed bin Sulayem, group chairman and chief executive at DP World, rushed away when asked by ITV whether he had received an apology from the government following severe criticism of its P&O Ferries business. And on the other side of the hall, Louise Haigh, the transport secretary, who made the comments about P&O being a “cowboy operator”, also made a swift exit.
Public services like the NHS must get over their “inhibition” about AI and accept the risk that some uses might fail, Sir Keir Starmer has said.
Saying there was “huge potential for AI to be a game changer when it comes to the delivery of public services”, Starmer complained: “There’s always an inhibition in government when it comes to technology and change, a real fear of change.”
Saying AI should be “central to government”, Starmer warned that civil-service culture meant “we’ll be a bit too inhibited from reaching for it in case somebody is held responsible for something that doesn’t go as well as everybody expects. We have to change that culture”.
Sir Keir Starmer has announced a £1.1 billion investment in Stansted Airport that will expand the existing terminal and create 5,000 on-site jobs.
The centrepiece of the plans is a £600 million extension to the airport’s existing terminal, which will create a bright, spacious environment with more seating areas plus new shops, bars and restaurants. Also included is a new on-site solar farm, an upgrade to the taxiway and an enlarged security hall.
The prime minister said the investment would open up new routes for work and holiday destinations.Gareth Powell, London Stansted’s managing director, said: “This is a really exciting time for everyone connected with Stansted as we know we have a critical role to play in serving the future capacity needs of London. Our aim is to be the airport of choice for even more passengers.”
AI will result in British people “doing different and better jobs”, Sir Keir Starmer has predicted.
The prime minister said that machine learning would not lead to “no jobs”, as some fear, but offered a “real opportunity” for the economy. He argued: “We need to run towards it.” Starmer said that AI had “massive potential on productivity and driving our economy” and Britain should not be “leaning out and saying this is rather scary”. Starmer said that AI had “massive potential on productivity and driving our economy”.
Citing an estimate by the former Google chief Eric Schmidt that AI would double productivity, Starmer said: “Imagine what that would do for our public services. Imagine what that will do for our economy. Obviously we have to bring people with us. It means that people will be doing different and better jobs, not no jobs, but it will really change our ability to take this country forward at some considerable speed.”
Paul Johnson, director of the Institute for Fiscal Studies, told Times Radio that the government would be in “straightforward breach” of its manifesto if it raised national insurance contributions for employers.
He said: “Let’s see whether she [Rachel Reeves, the chancellor] does it. It seems to me that would be a straightforward breach of a manifesto commitment. I went back and read the manifesto and it says very clearly: ‘We will not raise rates of national insurance.’ It doesn’t specify employee national insurance. But set that to one side, I think if she does want to raise genuinely significant amounts of money, then she almost certainly will have to breach that manifesto one way or another.
“And it’s probably less damaging to raise national insurance or income tax or VAT than it would be to try and get similar amounts in other ways. So, would this be dramatically damaging if it was another penny on national insurance? I mean, frankly, probably not. They would raise significant amounts of money as well, employer national insurance, one penny gets you something like £16 or £17 billion a year. So it’s a big chunk of money from a relatively small proportionate change in a very big tax.”
The prime minister has said that simply paying more into the NHS will not create a better health service.
In a Q&A with Eric Schmidt, the former Google boss, Starmer said: “If all we do is put more money into the health service as it is, we won’t properly improve it because demand is too great. The only way to make it fit for the future is to reform it and reimagine it, and that’s where AI and tech are so important to this project.
“I’m not talking about changing the basic principles, point of need and all the rest of it. I’m talking about in 70 years people can look back on the 2024 Labour government with as much pride as we do with the government of the post-war era.”
The prime minister told global business leaders that “this is a great moment to back Britain” as he reeled off a list of the UK’s economic advantages.
“Clear regulatory frameworks and protection, a legal system that sets high standards around the globe, a location that means we can speak to our colleagues in the Americas or Asia in the same day, a high ranking in the Global Innovation Index every year…” Starmer said.
“Our wonderful global language, our world-renowned sport and culture, this great modern city all around us, a heritage steeped in commerce and trade, a set of shared values centuries long of being a country that is open for business. You can’t put a price on any of this.”
Labour’s workers’ rights package is “pro-growth” and will make Britain’s economy higher-skill and more productive, Starmer has claimed.
Business groups have warned that the employment rights bill unveiled last week would make it riskier and more expensive to hire staff.
“Some people may be wondering about our labour market policies introduced last week,” Starmer acknowledged. “Let me be clear. They’re pro-growth. Workers with more security at work, with higher wages: that is a better growth model for this country. It will lead to more dynamism in our labour market.
“When I look at the British economy as a whole, it does seem as though it’s sometimes [that] we’re more comfortable hiring people to work in low-pay, insecure contracts than we are in investing in the new technology that delivers for workers, for productivity and for our country. And we’ve got to break out of that trap.”
Starmer has promised to “repair Britain’s brand” after diplomatic rows under the Tories.
He said he would show that “Britain can be a stable, trusted, rule-abiding partner — as we’ve always been”.
In a reference to Boris Johnson’s “f*** business” outburst during Brexit, Starmer said: “During the whole circus that followed Brexit, the last government made a few people less sure about [Britain’s pro-business environment], needlessly insulting our closest allies. And, of course, a few choice Anglo-Saxon phrases for business. Well, no more.”
Labour’s huge majority is a “unique advantage” for Britain to encourage investment, Sir Keir Starmer has argued.
Citing the stability of his government, he said: “We have a golden opportunity to use our mandate to end the culture of chop and change. The policy churn, the sticking-plaster politics that makes it so hard for investors to assess the value of any proposition.”
He insisted he was “thinking in years”, not hours. “The stability that comes with a large majority in our system, that is a unique advantage,” he said.
The prime minister said that public finances “need the tough love of prudence” now to enable future growth.
In his keynote speech at Guildhall, Starmer said: “We’ve got our problems, of course we have. As I’ve said, our public services need urgent care, our public finances need the tough love of prudence — challenges we can’t ignore. Because we know, just as every leader here knows, that those early weeks and months are precious, and no matter how many people advise you to ignore it, that you must run towards the fire to put it out, not let it spread further.
“So, we will fix our public services, we will stabilise our economy, and we will do it quickly, because we don’t want any of the problems associated with our inheritance misting up the shop window of Britain, distracting you from all those assets that I just listed.”
If the whole population benefits from economic growth, “it stops a country turning in on itself and against the world”, Sir Keir Starmer has said.
Speaking to business leaders, he said: “It’s not just [that] stability leads to growth — though we all recognise that — it’s that growth leads to stability. That leads to a country better equipped to come together and get its future back.”
He said the business bosses in the room were “pivotal” in helping to grow Britain. Calling the UK a stable place to do business, he praised the legal system, education system and the country’s leading role in AI, life sciences and clean energy. “You can’t put a price on any of this,” he said.
The UK government and business community are pursuing a “shared ambition” of growth, Sir Keir Starmer has said.
Addressing business leaders at the investment summit in London today, the prime minister told the audience: “We have a shared ambition: growth. You have to grow your business, I have to grow my country. Growth is the core that binds us together, the shared endeavour of prosperity.
“Growth is high wages, a more vibrant high street, public services back on their feet: less poverty, more opportunity.” He reiterated his desire for the UK to be the fastest-growing country in the G7 under his tenure.
Other investments announced include 5GW of new offshore wind developments, new solar power and battery energy-storage projects, investment in the gas-transmission networks supplying gas to 11 million homes and businesses across England and an investment to build the UK’s first reservoir in 30 years alongside upgrades to essential water and wastewater infrastructure across the southeast of England.
Shemara Wikramanayake, chief executive of Macquarie, the Australian infrastructure company, has announced a £20 billion package of fresh investment in the UK.
The investment, first reported by The Sunday Times, includes the roll-out of a network of fast-charging points for electric vehicles across the UK.
Roadchef, the motorway service station operator owned by Macquarie, plans to install about 650 fast-charging points for across most of its sites, partly powered by new solar energy capacity installed on site. It will also pilot charging solutions for heavy-goods vehicles.
by Alex Ralph
DP World said the expansion of the London Gateway port would create 400 permanent jobs, on top of the 1,200 presently employed at the site.
The investment forms part of a “rapid-growth plan” for the Thames Estuary hub, which opened in 2013. Sultan Ahmed bin Sulayem, group chairman of DP World, who is expected to attend the summit, said the “major investment … underlines DP World’s long-term commitment to the UK”.
DP World will have invested more than £3 billion at London Gateway in converting a former oil refinery site into one of the UK’s largest logistics hubs.
by Alex Ralph
DP World has announced a £1 billion expansion of London Gateway’s port in a boost for the government at the start of the investment summit after severe criticism by the transport secretary of its P&O Ferries business jeopardised the investment.
Confirming the investment, Dubai-based DP World said it would make it Britain’s largest container port within five years, increasing capacity by building two new shipping berths and taking the total to six able to receive the world’s largest container ships. A second rail terminal will also be added.
by Patrick Hosking, Financial Editor
No one seems to have told the gilt market about the love-in at Guildhall this morning. Yields, which determine how much it costs the British government to borrow money, have rocketed in the past month and continued to creep up this morning.
The yield on benchmark ten-year gilts was up 0.02 percentage points to 4.22 per cent. Borrowing costs are back to where they were in July amid continued investor anxiety about what may be in the budget on October 30.
It was not the most auspicious of starts. Before Labour’s investment summit on Monday, a cabinet minister’s derogatory comments about a major company threatened to derail a £1 billion investment.
But after a weekend of damage limitation by Sir Keir Starmer — which included publicly distancing himself from Louise Haigh, his transport secretary — the investment, and with it the summit, appear back on track.
Starmer needs the summit to be a success. He has spent much of his first 100 days in office being buffeted by events, with the early days of his premiership marred by scandals over loans and gifts, and bitter infighting in No 10.
• Read more: Why Keir Starmer needs Labour’s investment summit to succeed
Effective new medicines will be fast-tracked into the NHS to boost the economy and help patients, the science secretary has promised.
Peter Kyle said that medicines regulators would use the approach taken by the Covid vaccines taskforce to stop drugs becoming “mired” in bureaucracy for years. “Let’s take the learning from a crisis time and apply it to normal times,” he said.
Kyle said that Wes Streeting, the health secretary, had “taken personal responsibility for spreading innovation through the NHS” and argued that better regulation could make Britain more attractive than the EU to drugs companies. But he denied that this meant lower standards, telling BBC Radio 4’s Today programme: “I would say you need to regulate smartly and you need to regulate creatively.”
But he said this was “different” to just regulating less. “You don’t have to cut corners to get innovation through the regulatory landscape,” he said.
Businesses can see that the “direction of travel” is towards higher taxes but still want to invest in Britain, Peter Kyle argues.
The science secretary said that the number of big global companies at today’s summit “shows that they know we’re getting the fundamentals right”. He told Times Radio that “they are here because they have faith in this government”, despite plans for tax rises.
“We’ve been very clear that we are going to have to make some tough decisions in the budget” he said. “They also see a stable government, one that is keen to invest in infrastructure. One that is keen to invest in the big issues, the big opportunities we have.”
Asked by Sky News about repeated hints that employer national insurance contributions would increase in the coming budget, Kyle said: “They know what you know because they watch the news, they watch Sky News, and they listen to the reporting. They know the direction of travel.”
Elon Musk would be “very welcome” to hold discussions on investing in Britain, according to the science secretary, who denied that the world’s richest man had been blacklisted from today’s summit for insulting Sir Keir Starmer on his social media platform X.
Peter Kyle told Times Radio that Musk “doesn’t tend to do these sort of events” and pointed out that the Tesla boss had not attended similar summits under the Conservatives. “I stand absolutely ready to engage with him to talk about any potential global investments he’s making. I’m not aware of any at this moment in time,” Kyle said.
He told Sky News that he would “happily have a conversation with Elon Musk at any point in time”. But asked if Musk had not been invited because his criticism of the prime minister’s handling of riots over the summer, Kyle said: “Absolutely not. Our prime minister puts the country first, party second.”
P&O has “signed up to high standards”, a minister insisted this morning as the government attempted to shut down a row that had threatened a £1 billion investment from its parent company.
DP World, which owns the ferry company, is set to announce a package of cash for port infrastructure at the government’s investment summit today.
• Read more: How a critical interview put P&O owner’s £1bn ports deal under threat
Kyle told Sky News that while he was “appalled” by P&O’s past behaviour in sacking workers, “we’ve all turned a corner since that time”. Pointing to Labour’s employment rights bill, which would outlaw such behaviour, he said: “DP World is coming on that journey too, and we are really, really pleased about that.”