Theresa May returns to Downing Street this week after a walking holiday in Switzerland, a reminder to anyone still basking in the sun with a bottle of rosé that autumn is now upon us.
Unlike the rest of us mortals who spend the first day back in the office clearing out the inbox, the Prime Minister has no such luxury. There’s a handwritten reply from the Chinese President on her desk and rumours that the “three Brexiteers” – Cabinet members Boris Johnson, David Davis and Liam Fox – are up to no good.
If the first two months of May’s term were confined to crisis control in pre-season training, the next few months are most definitely game time. Investors remain split over how the Prime Minister’s business agenda will take shape during this crucial period: will she prove a friend or foe to businesses at home and abroad? The government’s recent praise for Team GB at the Olympics could offer a few clues.
Much has been written about the role former-PM John Major’s National Lottery funding plan played in the Olympians’ glory, while others have drawn parallels to the capitalist ethos driving the team (double-down on winners, drop the losers). Now the government is turning the tables. Rather than taking credit for the record medal count, they’re heeding lessons from the athletes.
Business secretary Greg Clark told the Sunday Times that the government will try to emulate Team GB’s success “as we bring together a long-term strategy for our industrial and commercial future”. Free market proponents should take comfort in Clark’s reassurance that a deliberate approach to investing in the country’s strengths won’t come with a dose of heavy-handed intervention, making sure “that the government doesn’t get in the way of decisions by specialists”.
That’s good news for investors who fear that May’s One Nation vision and vow to clamp down on executive pay means hostility towards big business. Rather than a radical departure from the previous government, I expect to see a subtle shift to a more conscientious style of capitalism. Two pre-season moves support that view: May’s stance on the Arm Holdings takeover and the decision to delay the Hinkley Point nuclear power station project.
First, the Prime Minister’s support for SoftBank’s £24bn takeover of Arm shows she does not take a one-size-fits-all approach to decision making. Days after promising to get tough on foreign takeovers, May welcomed the mega-deal, citing the Japanese firm’s decision to maintain Arm’s Cambridge headquarters and protect British jobs. That’s not a flip-flop, that’s a willingness to be flexible in the face of extenuating circumstances.
On the other hand, the surprise Hinkley Point delay led some to declare a protectionist pull-back of the red carpet that former-PM David Cameron laid out for China. I disagree. It was a prudent move in light of objections raised on several fronts, including the significant subsidies awarded to the project by May’s predecessors. In both cases, the Prime Minister was practising what she preaches by putting Britain first when dealing with corporates and governments overseas.
May’s conscientious capitalism also boasts a pivot towards greater inclusion. The government’s decision to hold the main Olympic parade in Manchester is not simply a way to honour the superstar cyclists who train there. It marks a symbolic shift away from London as the government’s focal point.
That small step will go a long way towards winning over Brexit sympathisers in the North West. Celebrating the national victory in the heart of the Northern Powerhouse also shows a willingness to commit to George Osborne’s pet project, even if the former chancellor was shown the door.
May has vowed to stretch the industrial strategy even further, however, hinting at plans to make the Midlands “an engine for growth”. It’s still early days to judge how May’s business agenda will play out for investors. But all signs point to a government that puts Britain first in a free and global market. As any Olympian returning home from Rio will tell you: Britain comes first, but we can raise the game by opening the door to players and coaches from overseas.