Post by : Badri Ariffin

UK Chancellor Rachel Reeves is set to meet senior ministers and business leaders in Saudi Arabia and Qatar this week, becoming the first UK chancellor to visit the Gulf in six years. Her visit coincides with the Future Investment Initiative (FII) in Riyadh, widely referred to as the "Davos in the Desert," where a series of trade and investment deals are expected to be unveiled.

The government is keen to showcase the UK as a stable, attractive destination for Gulf investment. Reeves emphasized the mission’s focus on growth, highlighting Britain’s regulatory expertise and business stability as key selling points to investors from the Gulf Co-operation Council (GCC), which includes Saudi Arabia, the UAE, Qatar, and Kuwait. Analysts estimate that a potential trade deal could add £1.6bn annually to UK GDP—a modest boost, less than a tenth of one percent.

While Reeves pushes for global engagement, the domestic stage presents challenges. The Employment Rights Bill, designed to grant workers protections on sick pay and unfair dismissal from their first day, has raised concerns among business groups. Critics argue that such provisions could deter hiring at a time when UK job vacancies are rising.

Last week, 13 prominent business organizations—including the CBI, Make UK, and the Federation of Small Business—urged lawmakers in the House of Lords to consider an amendment delaying these new rights until after six months of employment. The Resolution Foundation, traditionally aligned with Labour, joined in warning that immediate protections could create unintended obstacles for employers.

The juxtaposition of foreign trade ambitions and domestic labor reforms has sparked a debate over the government’s strategy. While UK businesses face recent tax hikes totaling £25bn, Reeves’ overseas mission is aimed at building investor confidence and promoting the UK as a reliable trading partner abroad.

As the FII event kicks off, Reeves will engage with top UK and international CEOs, while back home, the Employment Rights Bill heads to the House of Lords, setting up a week of significant economic and political focus for the UK.

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