Chancellor Rachel Reeves will open this week’s most important – and perhaps most secretive – diplomatic visit by UK ministers to the Gulf region on Monday and Tuesday. It will be the first such trip by a UK chancellor in six years. Her agenda includes senior-level meetings with ministers from both Saudi Arabia and Qatar. In doing so, she will take part in negotiations with senior Saudi royals to strengthen trade relations and find new opportunities for investment.
The TCI visit is timed to coincide with the Future Investment Initiative (FII) taking place in Riyadh. What we see on the ground This event is colloquially known as the “Davos in the Desert.” On Tuesday, Reeves will be one of hundreds of other UK and international CEOs on the FII. She will announce a series of two-way trade and investment deals, designed to position the UK as a long term stable and attractive market for Gulf nations.
On international trade, Reeves is eager to push through the Gulf Cooperation Council (GCC) trade deal. This group consists of the four original OPEC nations of Kuwait, the UAE, Qatar, and Saudi Arabia. She calculates that this agreement could contribute about £1.6 billion to the UK’s GDP annually. That figure represents less than one-tenth of one percent of the whole economy.
“Our number one priority is growth, so I am taking Britain’s offer of stability, regulatory agility and world-class expertise directly to one of the world’s most important trade and investment hubs, making that case in our national interest.” – Rachel Reeves
Reeves’s efforts, both on the ground and in ramping up international trade relationships. Now, perhaps unsurprisingly, she is under increasing fire for her government’s crown jewel Employment Rights Bill. This legislation aims to grant workers new rights and protections concerning sick pay and unfair dismissal from their first day of employment. The House of Lords, which are expected to debate the bill on Tuesday, have an opportunity to reinsert these critical climate provisions.
Reeves’ administration has been adept at scoring trade agreements with like-minded nations, including India and the United States. Critics point out its failure to reassure UK businesses adequately. More than that, our businesses are still reeling from the impact of a £25 billion tax hike, imposed in the last budget. Maybe they’re just as concerned about the threat of additional, still greater tax increases any day now.
Business leaders have recently shared ambivalent feelings about Reeves’ trade initiatives. Not surprisingly, lots of people have welcomed the administration’s work to snag international trade agreements. Fears over the domestic economic stability and protecting British businesses bubble beneath the surface.