- One of the city’s most important cheese makers says the country is perceived as irrelevant
- On his travels, he said, no one talks about the United Kingdom anymore.
- If Britain were a company, it would need a rebrand
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The days and weeks leading up to the Budget are always full of speculation. The March 6 statement has more consequences than most, for the country and the Conservative Party, as it is the Chancellor’s last great opportunity to court the electorate.
Jeremy Hunt has vowed to emulate Nigel Lawson, tax reformer extraordinaire who, as Margaret Thatcher’s chancellor, was one of the architects of the UK’s economic revolution in the 1980s.
Lord Lawson made mistakes, some of them serious. But the audacity of his best measures – particularly his reduction of the top tax rate from 60 to 40 per cent – was that they made the world talk about Britain.
It sent a powerful message about the kind of place the country was and aspired to be. Lawson’s Big Bang reforms in the City in 1986 made London a hotspot for foreign capital and the smartest and most talented young bankers on the planet. We need an injection of that buccaneer spirit now. When asked his opinion on the United Kingdom at a dinner a few days ago, one of the City’s most important cheeses said that the problem is not that the country is perceived as a lost cause, but as irrelevant.
On his travels, he said, no one talks about the United Kingdom anymore. If Britain were a company, it would need a rebrand. Pessimistic beliefs about the London market are in danger of becoming self-fulfilling prophecies. When the chief executive of a bank like Standard Chartered, whose shares are listed here despite the international nature of its business, describes its valuation as “cr*p”, we have a problem.
Flying the flag: Nigel Lawson’s Big Bang reforms in the City in 1986 turned London into a nest of foreign capital
Hunt wants to recreate a Lawsonian Big Bang in technology and life sciences. However, the energy and enthusiasm has been fading from the UK markets. Ambitious founders aim to go public in the United States, where they believe they can make more money, or to be bought out. Defeatism is in the air.
A rebrand may seem confusing, but I have three concrete suggestions for Hunt.
First, launch a Big British Isa.
There is currently a maximum limit of £20,000 a year for these tax-efficient savings accounts.
A further £5,000 could be added to the annual allocation and invested in UK shares. Broker Permier Miton has calculated that he could raise more than £200bn over five years for British companies. That would reduce the cost of capital, improve liquidity in the markets and raise companies’ share prices, encouraging companies to list here. Secondly, remove the ridiculous tourist tax and allow foreign visitors to reclaim VAT on their purchases. All it does is take buyers to places like Paris or Milan.
Thirdly, show respect for our engineering flagships, BAE Systems and Rolls-Royce. The latter, as reported by the Mail on Sunday, is leading the race to build the UK’s first fleet of mini nuclear power plants, known as small modular reactors (SMR).
But the ironically named government body Great British Nuclear is holding a competition to win the contract. Therefore, Rolls has to face foreign competitors.
Rolls-Royce, despite its past troubles, is a name that resonates as synonymous with the best of Britons. The company, whose shares have risen 160 percent in the past year, is seeing great success under new boss Tufan Erginbilgic.
So why not act and award him that contract quickly, because unless that happens potential export buyers will be wondering why they should buy his SMRs while the UK government itself dithers?
It’s time to fly the flag with pride.