"Shiin IPO, Review of Labor Rights, etc."
UK Prime Minister Keir Starmer denied reports in the British media that capital gains tax would be raised to a maximum of 39%, seeking to appease businesses.
On the 14th (local time), in an interview with Bloomberg TV, Prime Minister Starmer said, "Many speculations are quite off the mark," adding, "(The budget) will be decided based on whether it helps growth."
Bloomberg News interpreted that it is unusual for the UK Prime Minister to comment on measures the Chancellor of the Exchequer will take, viewing it as an attempt to ease anxieties ahead of the budget announcement scheduled for the 30th. The Labour government led by Starmer has experienced a sharp drop in approval ratings about 100 days after taking office.
Starmer previously revealed that the public sector fiscal deficit inherited from the Conservative government amounts to ?22 billion (approximately 39 trillion KRW). One of the funding sources to cover this deficit is an increase in capital gains tax. Since the Labour Party pledged in its election manifesto not to raise the three major tax revenues?value-added tax, income tax, and national insurance contributions?raising capital gains tax is considered inevitable.
Currently, capital gains tax in the UK is imposed at a lower range than income tax, between 10% and 28%. According to tax authorities, the UK government earned about ?14.5 billion (approximately 26 trillion KRW) from capital gains tax last year. Investors are concerned that raising capital gains tax too much could harm entrepreneurship. In fact, private equity firms and investors are reportedly considering a mass exodus from the UK.
However, when asked about specific details, Starmer said, "We will have to wait for the budget for the details," and did not provide an answer. He also stated that decisions on the budget "will be made based on whether it helps growth."
Shein, the "Chinese Uniqlo" fashion e-commerce company with a corporate value of $66 billion (approximately 90 trillion KRW), is currently preparing for an initial public offering (IPO) on the London Stock Exchange. According to foreign media reports, Shein submitted IPO-related documents confidentially to authorities in June.
Regarding questions about Shein's listing, Starmer said, "I do not discuss individual businesses," but added, "High standards are an important issue for us." He further stated, "We will review all issues, including labor rights."
Shein originally planned to list in the US, but due to allegations of using cotton produced by forced labor of Uyghurs in the Xinjiang region, it faced strong opposition from US politicians and shifted to the UK. Bloomberg predicted that since the Labour government led by Starmer has made worker protection a key pledge, Shein's UK IPO will also face controversy.
On the same day, Starmer held an international investment summit at London Guildhall and pledged about ?63 billion (approximately 112 trillion KRW) in private investment. He also announced plans to eliminate bureaucratic obstacles to investment and to modernize the UK regulatory system, stating he would review regulatory policies with growth in mind.
The event was attended by Ruth Porat, Chief Investment Officer (CIO) of Alphabet; Eric Schmidt, former CEO of Google; David Ricks, CEO of Eli Lilly; and Larry Fink, CEO of BlackRock, among others.
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