UAE Threatens to Pull Billions From UK Over Manchester City Verdict

The United Arab Emirates is warning Prime Minister Andy Burnham that it will pull billions of pounds of investment out of the UK in retaliation for the guilty verdict against Manchester City.

The diplomatic standoff represents a major test of Burnham’s premiership and raises questions about why the Prime Minister praised City’s ownership just days before the club was found guilty of financial irregularities by the Premier League.

City were found guilty of all but one of the 115 charges brought against them, with the club found to have artificially inflated its financial results by more than £900m to circumvent strict spending rules. Potential punishments include a points deduction, heavy fines or possible expulsion from the league.

Burnham forced into climbdown

Burnham, the former mayor of Greater Manchester, initially told the BBC he would be “really concerned” if the UAE decided to sell the club.

“I would be really concerned to lose them [as owners of Manchester City],” he said. “They’ve been such a huge partner in the building of modern Manchester. Obviously, the building of Manchester City into the global force that it is.”

He added: “I can’t intervene more in the process,” before appearing to row back: “I am not getting directly involved in the process.”

Downing Street was subsequently forced to issue a statement stressing that “the initial judgment [against City] is serious and there can’t be any suggestion that anyone is above the rules”. The statement continued: “If wrongdoing is established, those responsible should face the appropriate consequences.” The word “if” was later changed to “wherever”.

Oxford-Cambridge corridor under threat

The UAE is threatening to pull the plug on billions of pounds the Government was seeking in private investment for a hi-tech hub between Oxford and Cambridge, billed as the UK’s answer to Silicon Valley.

Rachel Reeves, the former chancellor, had claimed the development of the Oxford-Cambridge corridor could inject £78bn into the UK economy by 2035. The Government has pledged £500m to kickstart the scheme but is seeking £10bn in private investment to get it off the ground. Abu Dhabi is seen as key to that investment.

Reports suggest the UAE has poured more than £30bn into major UK sectors in the past five years, including defence, life sciences and technology. The fallout threatens to derail future deals at a time when the Government is desperate for foreign investment to revive the economy.

Al Mubarak’s Downing Street meeting

It has emerged that Khaldoon Al Mubarak, City’s chairman and chief executive of the Mubadala sovereign wealth fund, met Jonathan Reynolds, the Business Secretary, in Downing Street on September 14, a fortnight before the Premier League announced its verdict.

The Department for Business and Trade said the two men did not discuss Manchester City but instead focused on trade, defence and security. Al Mubarak was aware City had been found guilty at the time of the meeting, although the details had not yet been made public.

Emirati officials have separately warned the UK Government that billions of pounds of future investment could be withdrawn. On Friday, Downing Street said it did not dispute reports that the verdict against City had “undermined” the UAE’s “appetite for future grand-scale UK commitments”.

Abu Dhabi courtship revealed in leaked minutes

Documents obtained through freedom of information requests reveal that senior Labour ministers had been courting the UAE for months before the verdict. A letter written on February 10 by Lord Stockwood, then a senior minister, invited Al Mubarak’s “partners to visit our Oxford-Cambridge Corridor project”.

Lord Stockwood had previously discussed the project at meetings hosted by Al Mubarak in Abu Dhabi in February. Minutes of those meetings show Lord Stockwood promoted the UK’s “unique capabilities” in research, design and AI growth.

He met separately with Sheikh Hamad bin Zayed Al Nahyan, who runs the Abu Dhabi Investment Authority (with approximately £900bn under management), and with Al Mubarak to discuss investments through Mubadala, which manages almost £300bn.

“JS [Lord Stockwood] noted he wanted to start a conversation, to work both ways on mutual ambitions on investment. JS noted this government is supportive of wealth creation and pro-growth,” the minutes read.

The minutes also record Lord Stockwood highlighting “Ox-Cam, and the Northern Growth Corridor to combine the different capabilities of the mayoralties. Investment is one part of this, but knowledge transfer too.”

Al Mubarak, for his part, noted that Abu Dhabi was “very proud of what they have achieved through their investments in Manchester.”

Why the crisis is personal for Burnham

The crisis is particularly acute for Burnham given his close ties to Manchester, where the influx of Gulf capital is credited with the city’s transformation and which in turn provided a platform for his bid to replace Sir Keir Starmer in No 10.

City’s ultimate owner is Sheikh Mansour bin Zayed Al Nahyan, brother of the UAE’s president, which explains why the Premier League’s finding has proved so damaging to bilateral relations and why the matter is so politically sensitive.

In 2024, the Government blocked an attempted takeover of The Telegraph by an Abu Dhabi-backed consortium, adding to existing tensions between London and Abu Dhabi.

What happens next

City have said they will appeal the Premier League’s findings. The club was found guilty of arranging “sham contracts” to disguise payments and has claimed the verdict “contains clear material errors, of law, principle and fact and is unsafe.”

Lord Stockwood, a former chairman of Grimsby Town football club who stepped down as a minister in July following the change of prime minister, declined to comment on claims that Abu Dhabi investment was at risk as a result of the Manchester City scandal.