Unknown, unknowns of the May era in Britain

by Victor Cherubim

( July 13, 2016, London, Sri Lanka Guardian) Nobody expected Theresa May would be the second woman, the 13th Prime Minister of Britain during the reign of Queen Elizabeth II, so soon. Nobody knew that she would turn a defeat of the “Remain” group into a victory for both “Remain and Leave” campaigns of the Referendum. Though the political context has changed, nothing really has happened or may happen for a while. From a legal standpoint, UK is still a full member of the European Union,

In the short term  

Global stocks have been rattled by the political turmoil in the U.K. But minutes after Theresa May won the race to succeed David Cameron as Prime Minister, the FTSE 100 market was boosted and the Pound spiked over $1.30. The rally of 92.22 points or 1.4% to 6682.86 was the highest for the FT in 11 months.

Siemans, Europe’s largest industrial and engineering conglomerate decided to back away from moving out of the UK and said:”We’re here to stay.” Weeks previous it had warned its 14,000 employees in its 13 manufacturing sites in UK that the higher costs and uncertainties of Britain leaving the EU could make the UK a less attractive place to do business, but made an about turn. Other conglomerates are doing likewise. Why?

The surge of enterprise is one of the unreported trends in the British economy, not in the last year, but over the last decade.

The number of Companies in the UK has reached an all time high of 3.7 million, up from 800,000 in 1979.
Business start-ups require access to talented entrepreneurs, but unknowingly it was the EU nationals, whether they were Polish, Rumanian, besides Irish, French and German, who were flooding into Britain in the months before Brexit. It was not one would expect, nor would it be true to read too much into it.

Venture Capital from Europe had no doubt planned their invasion into Britain months ahead of Brexit. They are now here to stay.

Britain is safe for business

There is no denial that Britain is safe for business. We may list a few reasons:

First, there is less regulation in Britain. It is simpler to set up a Company here than anywhere else in Europe. It is said to be the easiest country in which to start up a Business?

Second, Britain, we are informed will soon have the lowest Corporation Tax rate of   any major economy. It is expected to be reduced from 17% to 15%, compared to   29% in Germany and 33% in France.

Third, Capital Gains Tax for Venture Capital is a mere 10% as investment is rewarded.

Fourth, Britain’s migration policy attracts high skilled Chinese, Indian, US and other   EU nationals and they are here to stay.

Fifth, the huge devaluation of Sterling since Brexit has made the UK a lot cheaper.

Now that the “wait and see” of Brexit is over, there is the bonus to business confidence. The whole affair is low key, while screaming headlines relate a different story.

What about the long term?

Britain believes in getting on with it. The saying goes “a stiff upper lip,” is all that’s required. Many will know that the “Remain” camp lost out to right wing nationalists who wanted to exert their sovereignty. Everything was blamed on Europe, but suddenly unknown to the many Brexit was meticulously planned years in advance.

Theresa May, as the new Prime Minister will soon get moving appointing her Cabinet with both members of the Remain and Leave Camps. She knows the Opposition Labour Party is in disarray and has very carefully chosen her words to say there won’t be an early election. She will first want to unite the Conservatives and the Nation and govern with good sense. There is no doubt that when the time is right she will go to the electorate on the results of her policies, sooner than anyone expects.

The job in the long term is to “open up Britain to the world for business”. She wants to change the face of Britain with her message as “Compassionate Conservatives,” with a win/win for workers/consumers/investors.

What can Sri Lanka learn?

We too can be bold to make the most of the turbulence, instead of going around with a begging bowl. We do this by being “Open for Business.” The Supreme Court did us a blessing in disguise by overruling the VAT increase. The more money people have in their pockets, they more they are likely to spend. The more there is confidence in the Government, the more there will be investors ploughing in Venture Capital. The more there is investment in Sri Lanka, the more it will deliver progress to our people and power our future – a win/win situation.