- One of City’s biggest cheeses says country is perceived as irrelevant
- On his travels, he said no-one talks about the UK any more
- If Britain were a business, it would need a re-brand
The days and weeks running up to Budgets are always replete with speculation. The statement on March 6 is more consequential than most, for the country and the Conservative Party, since it is the Chancellor’s last big chance to woo 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 bad ones. But the boldness of his best moves – in particular his cut in the top rate of tax from 60 to 40 per cent – was that they set the world talking about Britain.
He sent out a powerful message on the sort of place the country was, and aspired to be. Lawson’s Big Bang reforms to the City in 1986 turned London into a honeypot for overseas capital and for the planet’s sharpest and most talented young bankers. We need an injection of that buccaneering spirit now. When asked his view of the UK at a dinner a few days ago, one of the City’s biggest cheeses opined the problem is not that the country is perceived as a basket case, but as irrelevant.
On his travels, he said no-one talks about the UK any more. If Britain were a business, it would need a re-brand. 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 his valuation as ‘cr*p’, we have a problem.
Hunt wants to re-create a Lawsonian Big Bang in tech and life sciences. Energy and verve, however, have been draining out of UK markets. Ambitious founders aspire to a US listing where they believe they can make more money, or to being bought out. Defeatism is in the air.
A rebrand might sound woolly but I have three concrete suggestions for Hunt.
First, launch a Great British Isa.
Currently, there is a ceiling of £20,000 a year on these tax-efficient savings accounts.
Another £5,000 to be invested in UK shares could be added to the yearly allowance. Broker Permier Miton has calculated it could raise more than £200billion in five years for British businesses. That would lower the cost of capital, improve liquidity on markets and lift company share prices, encouraging firms to list here. Second, scrap the ludicrous tourist tax and allow foreign visitors to reclaim VAT on their purchases. All it achieves is to drive shoppers to places such as Paris or Milan.
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Third, show respect for our engineering flagships, BAE Systems and Rolls-Royce. The latter, as the Mail on Sunday reported, is leading the race to build the UK’s first fleet of mini-nuclear power stations, known as Small Modular Reactors (SMRs).
But the ironically-named government body Great British Nuclear is running a competition for the contract. So Rolls has to slug it out with overseas competitors.
Rolls-Royce, despite past problems, is a name that resonates as synonymous with the best of British. The company, whose shares have risen 160 per cent in the past year, is going gangbusters under new boss Tufan Erginbilgic.
So why not crack on and award it that contract fast – because unless and until that happens, potential export buyers will be asking why they should buy its SMRs while the UK’s own government dithers.
Time to fly the flag with pride.
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