Keir Starmer is set to announce a £10 billion AI data centre which will bring 4,000 jobs to the north-east of England and be funded by a private equity firm run by a huge supporter of Donald Trump.
The Prime Minister is hosting company chief executives in New York on Thursday in a bid to drum up foreign investment in the UK. He will welcome Blackstone's investment in an “artificial intelligence data centre” to be built in Blyth, Northumberland, as a “vote of confidence in the UK”.
Blackstone's founder, chairman and CEO is Republican Stephen Schwarzman, who filed for bankruptcy in May. Support President TrumpSchwarzman will receive an estimated $896m (£670m) in fees and dividends from Blackstone in 2023.
The deal has been in the planning for some time after the investment firm bought the former site of collapsed battery start-up Britishvolt in April. The project was set to create 3,000 jobs.
Construction on the facility is scheduled to begin next year, and the center will be designed to store the data needed to power AI and the information generated by AI systems.
Blackstone announced it would invest £110 million in a fund to support further skills training and transport infrastructure in the region.
Starmer is due to meet with Blackstone chief operating officer Jon Gray, a Biden ally, as well as representatives from another private equity firm, Carlyle Group, Australia-based bank Macquarie, investment fund Global Infrastructure Partners and US banks JP Morgan, Bank of America and Citigroup.
Speaking ahead of the meeting, the Prime Minister said: “My Government's first mission is to grow the economy so that hard-working British people benefit, and increasing foreign investment is a key part of that plan.”
“New investments such as the one announced today with Blackstone are a huge vote of confidence in the UK and demonstrate that the UK is once again a leading player on the world stage and open for business.”
The Prime Minister is also due to visit Brussels next week to step up efforts to “reset” Britain's relationship with the European Union.
European Commission President Ursula von der Leyen confirmed after the meeting in New York that Starmer would visit Brussels next week. “Nice to meet you on the sidelines of the UN General Assembly,” the European Commission president tweeted. “I look forward to welcoming you to the European Commission in Brussels next week to discuss re-establishing the EU-UK relationship.”
Starmer has made investment in Britain a top priority since taking office and, at the Labour Party conference last week, called on business leaders to talk to Downing Street directly about any problems. He is accompanied in New York by Varun Chandra, a business adviser who previously ran the corporate intelligence firm Hakluyt.
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The government is also focused on an international investment summit in October, which will be held just a few weeks before the budget, and hopes to appoint an investment minister by then.
The European Commission President was speaking at the UN General Assembly on Wednesday. Photo: Leon Neal/PA
Labor held its biggest ever business day at its conference this week, attended by more than 500 lobbyists and executives from companies including Uber, Blackstone, oil companies ExxonMobil and Shell, and banks Citigroup and JP Morgan Europe.
Many of the questions from the floor sought more details about the government's industrial strategy plans, its approach to taxation and how it will implement its workers' rights policy package.
The government is consulting on plans to increase taxes on private equity firms, with Chancellor Rachel Reeves wanting to increase taxes by at least £500 million, but the industry is lobbying against plans to close tax loopholes that would change the way people working in private equity pay capital gains tax rather than income tax on investment profits, known as carried interest.
A Treasury analysis found that about 3,000 people received carried interest in 2022 and paid income tax at the maximum 28% rate instead of the maximum 45% rate.
