Now that we have our new Lady PM in Theresa May and urbane Chancellor of the Exchequer, Philip Hammond (both accurately predicted by my postman) it’s only fair some credit is given to their predecessors. Back in 2010 the Cameron / Osbourne combo. inherited a staggering financial crisis upon a global scale never seen before. Six years later the UK deficit is not yet fixed and the level of government debt is still eye-watering but the UK has the fastest growing economy in the G7. The UK stock market is back up to pre-Brexit levels and international investors and businesses have by and large kept faith in the UK economy. At the push of a button the money could go elsewhere – maybe to the evil empire in Frankfurt – but most has stayed in the UK. Life has been tough for all UK businesses during the last 8 years (tell me about it…) but just think about those basket case Mediterranean economies. I think we can all give ourselves a small slap on the back. It’s a tough act which T&P have to follow. Investor confidence is everything. My economic guru Veejay Singh puts it down to six actions since 2010:
1. Establishing a coalition government – one that actually worked
2. Creating an Office of Budget responsibility so the Chancellor can’t cook the budget figures
3. Giving interest rates and quantitative easing to the Bank of England – free of political control
4. Introducing fixed-term Parliaments so policies have a decent time to take effect
5. Developing the Big Society agenda i.e. encouraging new ways of delivering public services
6. Brexit – freeing the UK to play on the global stage without the constraints of the EU.
For UK business the future is more than interesting. Theresa is clearly intent on establishing the UK as a global trading partner to rival the EU and has scrapped the Dept. of Energy and Climate Change. Instead the new Dept. of Business, Energy and Industrial Strategy will take its place.
This has been the cue for lots of handwringing by environmentalists and lifted eyebrows in the gas-guzzling USA (which you’ll remember never ratified agreement to the Kyoto protocol). Former party leadership rival Andrea Leadsom has been made Environment Secretary and she is known to be less than sympathetic to green taxes and subsidies. Hopefully once the UK is clear of Vat requirements imposed by the EU the Chancellor will take on HM Treasury and HMRC with the equally radical intention of replacing VAT with a General Sales Tax. It would save billions. Theresa is a tough cookie though. She has been known as ‘The Ice Maiden;’ because she seems to lack a sense of humour and was quite happy to take on the Police Federation at their annual conference. She does though have a good feeling for popular opinion. She confirmed as much with her appointment of Boris Johnson as the new Foreign Secretary.
The EU (and the Germans in particular) were less than amused. Boris is enormously popular at home thanks to his shambolic image but as ruthless and outspoken as necessary when doing business. You don’t get to be Mayor of London if you’re a fool. His comparison between German ambitions to expand the EU with the Nazi’s ambitions to do the same was not very diplomatic but made its point and expressed the view of many Brexit voters rather nicely.
Frank-Walter Steinmeier, the funloving, laugh-a-minute German foreign minister has branded his counterpart as ‘irresponsible’ and suggested that the UK electorate is now ‘…experiencing a rude awakening after irresponsible politicians lured the country into Brexit, then once the decision was made, bolted without taking responsibility. Instead they went to play cricket”. His comments confirmed a deep misunderstanding of the British. It was the first test against Pakistan at Lords. Talk about waving a red rag in front of a bull. As my father used to say, ‘Never trust a country that doesn’t play cricket’.