Analysing The Political Economy

Has Big Business Had Enough of Broken Britain?

By Graham Vanbergen: Today, the Financial Times reported that ‘the world’s largest building materials company CRH, is planning to move its listing from London to New York in a fresh blow to the UK’s capital market.’ It also reported that large listed companies, including Kape Technologies, Aveva, Micro Focus and cyber-security company Avast were considering the same because they are choosing for a number of reasons to list their shares in the US. It very much looks as though big business has had enough of broken Britain.

The Times today is running no less than six stories about the failing housing market. Bloomberg tells of the pressure the Pound is under, that food shortages will be a new norm and the FT has a big read on Britain’s disintegrating car manufacturing industry. City AM writes that Jeremy Hunt must soften the blow from a six point corporation tax hike to 25 per cent at the 15 March budget to stop businesses from scrapping desperately needed investment.

Stories about direct foreign investment rebounding in Britain tell us two things. The first is that FDI fell quite dramatically after the EU referendum result. The second is that the UK is pretty cheap to buy assets now that they’ve fallen in value so hard – along with the UK’s currency, which has also fallen – making them even cheaper.

In April 2021, research found that nearly 450 financial services firms had shifted jobs to the EU as a result of Brexit. According to the think tank New Financial, firms moved something like £1 trillion of assets to the EU.

I could now list the many, many reasons why Britain’s economy is not doing very well. But it is the news relating to Brexit that is relentless. Research by the Centre for European Reform (CER) just three months ago showed that Britain’s economy was actually 5.5% smaller (over £100bn) than it would have been had it remained inside the EU.

More confirmed research has shown the UK’s goods trade was 7% lower, and that overall investment is now 11% down on what it would have been had the UK remained an EU member. In addition, the Office for Budget Responsibility stands by its prediction that Brexit will cause a long-tail hit to GDP per capita of 4%. Two things to note here. The first is that a 4 per cent hit to the economy is basically a recession in hiding. The second to note is that the OBR only went as far as to predict ten years ahead.

There is no debating this issue. The pro-Brexit economic arguments have died a death. The promised sunlit uplands were the delusional mouthpieces of right-wing economic failure. It was as if trickle-down economics had failed (which it did) and they wanted to double down on neoliberal capitalism to give it one last boost.

It doesn’t help that some economists are now predicting that Poland will overtake Britain by the end of the decade. Keir Starmer ended up saying – “I’m not comfortable with that. Not comfortable with a trajectory that will soon see Britain overtaken by Poland. Nor am I prepared to accept what the consequences of this failure would mean.

There are other reasons why big business is steering clear of Britain. Good education and public health systems mean a more productive workforce. Good transport means the same. But the NHS is in a perma-crisis and projects like HS2 – now treble its original budget are way off delivery. Strikes at the scale currently underway across the country also signal that wage bills will be rising but also means a largely unhappy workforce angrily facing down their bosses. Then there’s the housing crisis – set to only get worse, the social care crisis and the people in power who have little clue as to what to do about it other than increase taxes.




Of course, it doesn’t help that the UK has had to suffer the type of politics that makes the British political satire sitcom Yes Minister seem more grown up than the current political incumbents who seem to favour a pass-the-parcel approach to leadership. Internationally, this has meant that the UK is something of a laughing stock. That being the case – few investors wish to be mocked for investing in it.

Since the Conservative party came into power in 2010, we’ve had ten justice ministers, nine education ministers, eight foreign office ministers, seven chancellors, six health ministers, five defence ministers and not least, five Prime Ministers. It all sounds like a Christmas carol gone wrong that hit the charts in December.  Sunak seems to be fairing a bit better, but the previous four have dramatically failed their role in high office and were pushed out by their own.

None of this bodes well if long-term planning is any part of your decision-making process for a business.

One glimmer of hope though. Sunak’s new Brexit deal between the UK and the EU may help bring Britain back, providing relations with Brussels continue to improve, some healthier fundamentals. Those fundamentals will have to start with the normalising of trade relations. And if Keir Starmer takes the reins at No10 Downing Street – it very much looks like there will be some serious people with the national interest at heart at the helm. Wouldn’t that be a breath of fresh air after a decade of infighting and national division!

To attract business though, stability is key. Knowing what you are facing is key. For now, big business is looking elsewhere – but that could change quickly if the people at the top start welcoming business and not being as hostile as it is at the moment. Broken Britain can be fixed.




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