RUTH SUNDERLAND: Time to boost Brand Britain with the buccaneer spirit of Nigel Lawson
- One of City’s biggest cheeses says land is seen as irrelevant
- During his travels he said that no one talks about Britain anymore
- If Britain were a company, it would need a new name
The days and weeks leading up to the Budgets 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 chance to win over the electorate.
Jeremy Hunt has vowed to follow the example of tax reformer extraordinaire Nigel Lawson, who as Margaret Thatcher’s chancellor was one of the architects of Britain’s economic revolution in the 1980s.
Lord Lawson has made mistakes, some of them bad ones. But the boldness of his best acts – especially his cutting of the top tax rate from 60 to 40 percent – was that they got the world talking about Britain.
He sent a powerful message about the kind of place the country was and wanted to be. Lawson’s Big Bang reforms of the City in 1986 turned London into a honeypot for overseas capital and for the world’s sharpest and most talented young bankers. We need an injection of that buccaneer spirit now. When asked at a dinner a few days ago for his views on Britain, one of the city’s biggest cheeses opined that the problem is not that the country is seen as a basket case, but as irrelevant.
During his travels he said that no one talks about Britain anymore. If Britain were a company, it would need a new name. Pessimistic views about the London market are in danger of becoming self-fulfilling prophecies. When the CEO of a bank like Standard Chartered, whose shares are listed here despite the international nature of its operations, describes its valuation as ‘cr*p’, we have a problem.
Raising the flag: Nigel Lawson’s Big Bang reforms to the city in 1986 turned London into a honeypot for overseas capital
Hunt wants to recreate a Lawsonian big bang in the technology and life sciences. However, the energy and enthusiasm have disappeared from the British markets. Ambitious founders aim for an American listing where they think they can make more money, or be bought out. Defeatism is in the air.
A rebranding may sound vague, but I have three concrete suggestions for Hunt.
First, launch a Great British Isa.
There is currently a cap of £20,000 per year on these tax-efficient savings accounts.
A further £5,000, to be invested in UK shares, could be added to the annual fee. Estate agent Permier Miton has calculated that it could raise more than £200 billion for British companies in five years. That would lower the cost of capital, improve liquidity in the markets and increase company share prices, which would encourage companies to list here. Secondly, abolish the ridiculous tourist tax and allow foreign visitors to reclaim VAT on their purchases. All it achieves is to drive shoppers to places like Paris or Milan.
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 Britain’s first fleet of mini nuclear power stations, known as Small Modular Reactors (SMRs).
But the ironically named government body Great British Nuclear is competing for the contract. Rolls therefore has to compete with foreign competitors.
Rolls-Royce, despite past problems, is a name that resonates as synonymous with the best of the British. The company, whose shares have risen 160 percent in the past year, is going gangbusters under new boss Tufan Erginbilgic.
So why not award the contract quickly – because unless and until that happens, potential export buyers will be wondering why they should buy their SBEs while the UK government hesitates.
Time to raise the flag with pride.