Why Britain remains the best place in the world to run an international business
Like many momentous occasions in recent history, we will all remember where we were on 24 June when the result of the UK’s EU referendum became clear.
For me, it was the arrival lounge of Terminal 5 at Heathrow. I was returning from four days in our US business where our team were locked in talks to sign a new utility partnership.
After starting life as a little plumbing repair company in the Midlands 22 years ago, HomeServe is now a major international business. In fact we are the largest utility home services provider in the US and have more customers in Europe than we do in the UK.
Britain has become a happy home for international business. Today the top 100 UK-listed companies generate three quarters of their revenue overseas. More overseas companies set up their European base in the UK than anywhere else. English is the lingua franca of international trade. The OECD rates the UK as the country with the fewest barriers to entrepreneurship in the world.
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In part this is why I had been an outspoken supporter for Remain. This wasn’t about HomeServe – we don’t expect our business to be impacted. Rather, as a major international business centre, it felt right for the UK to be part of the largest individual economy in the world.
So on 24 June, the referendum news had me returning home deflated.
It took something unusual to snap me out of it – a letter in the pile of post, postmarked from Africa. It was from an old friend, Charles Thuku in Kenya.
The first time he sent me a letter was 30 years ago. I was 15 years old and trying to make a success of my first proper idea – a national mail order fishing tackle business. I had already clocked that I could buy the materials cheapest from India and America. Then one day I received a letter from Charles – a Kenyan entrepreneur who had seen my advert in Trout & Salmon Magazine – saying he could tie the flies cheaper in Kenya.
We ended up forging a partnership that lasted for years. As a young entrepreneur growing up in Yorkshire, this was my first experience of international business.
Brexit means Brexit, but it doesn’t mean the UK’s presence on the international stage must be diminished. I am a firm believer that out of great challenge comes great opportunity.
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Back in 2011 HomeServe encountered its own significant challenge after we uncovered mis-selling issues in our UK business. At that time I turned to Martin Gilbert, founder of Aberdeen Asset Management. He told me that had they not had their 2002 split capital trust crisis, which saw their market cap go from over £1bn to only £50m, they would not be the successful £4.4bn business they are today.
Now I believe him. HomeServe is a much better business today than it was five years ago. We have come through those challenges stronger and more determined.
The Out vote will mean many tough challenges in the months and years ahead. But it is also a great opportunity for us to cement our position as the best place in the world to run a global business.
With the Autumn Statement, the government has an opportunity to send a strong signal that the UK is a great place for business.
The UK is the easiest place in Europe to set up and run a company – it takes just 13 days to set up a business in the UK, compared to an average of 32 days on the continent. We can cut back red tape even further.
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The support network that UK-based businesses have is second to none, from the financial powerhouse of the City right through to government. Take the Department for International Trade, which has well over 1,000 staff outside the UK, in over 100 countries. HomeServe has a shortlist of 15 target countries for our next international move. The Department for International Trade has provided us with invaluable support in all those we have visited so far. We must protect and develop these institutions.
Our business infrastructure also extends to tax. We expect companies based here to pay their taxes, and we hold them to account if they don’t. The reality is that today we have one of the most competitive corporate tax rates across the G20 at 20 per cent. This stable and attractive tax regime is an important sign that the UK is open for business.
Then there’s the most crucial thing – the people. The strength of our economy has meant that we have attracted one of the most diverse pools of talent in the world to the UK. The signals we send to this workforce need to be of continued openness and opportunity. The World Bank also ranks the UK as the second best place in Europe to employ workers, only behind Denmark. It is a system that works well for employees too.
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For this to work we need to create jobs. Take HomeServe – over the next 10 years we aspire to have 100,000 engineers and I want each of these to have an apprentice. This is a realistic ambition and government should be pushing the apprentice agenda harder to make it a reality.
I really believe that the UK today is the best place to do business with the world. We need to make sure it stays that way.
Since 23 June I have visited seven countries that are all potential new markets for HomeServe. Brexit was not raised in a single meeting we had, nor has it been a point of discussion with our new American partners.
There is a lot to do, but the possibilities for UK enterprise are global and abundant. Africa isn’t on HomeServe’s agenda today but I will be keeping in touch with my friend in Kenya – who knows what can happen when you are open to a world of opportunities.