Dear Financial Voice Reader,
A few years ago I wrote “I write to you having returned from India, Dubai, Malaysia and Singapore. I visited our High Commissions in Delhi, Kuala Lumpur and Singapore. On my return I have just done a BBC interview. Let me tell you why I am optimistic and hopeful about being in the UK.”
So now with Brexit and a Trump Trade War, am I just as confident? How much from that article is still true? Surprisingly, despite Brexit – almost all of it. There was only one part of one sentence that needs a strikethrough. Have a look:
We have in the UK for centuries invested in infrastructure. Infrastructure that is the envy of business persons who want electricity, rail, road, airports, office space, all the things we take for granted. But all the things which if you are a Tata, who invests in the UK, helps you achieve massive profits. You don’t after all pay for this infrastructure. It is historic sunk cost. Written off. Paid by generations long gone. Any businessman will tell you, such assets that you get for free allow your profit and loss to be very healthy. Indeed one way you create wealth is to sweat assets you bought for nothing. Again, just ask Tata.
So why do the entrepreneurs I met in these countries want to invest in the UK when opposition parties talk down the country (whichever political party – its job in opposition is to talk down the country sadly.)?
Our workers do actually work. They do not siesta. Our workers are well educated and innovative. Our universities are outstanding at innovation. Why? Years of investment. A business wants return on investment. We are part of the EU’s $12trillion GDP market, but not part of the Euro. We are the fifth largest economy in the world. We are a good place from where to export. I know because when I speak to UKTI colleagues in the Embassies and High Commissions around the world – I see it.
I am not seeking your vote. So I am not saying this other than it is true. What then of America? Make no mistake America is our competitor and also thankfully our business collaborator. We do best when we work with them and the Chinese or Koreans or Japanese – to tap into outstanding markets and make the best products.
As a government, you can spend on investment which fuels future growth or you can spend on consumers. The former is better because it also brings investment from abroad and this too boosts growth in the longer term. But we have to ensure the projects are likely to generate growth. And growth is not just about physical infrastructure but human infrastructure - in other words we have to invest in education and entrepreneurship skills. This is too often overlooked. We want not just foreigners to make profit from being in the UK, and repatriating those profits, but also the domestic population to profit.
Because in 40 years time, I will write about how the world still wants to invest in the UK.
