By Jonathan Saxty
MENTION the Glorious Revolution of 1688 to most people and you could well get a blank stare. That’s fair enough. The event is (sadly) not widely taught in British schools. Many commentators have drawn comparisons between Brexit and the English Reformation as the last time Britain (or England) ‘broke’ with Europe to chart its own course. But what historian Professor Niall Ferguson called “a giant Anglo-Dutch business merger” could give us an insight into how the UK could blast forward in the next century.
As Professor Ferguson pointed out in his television series Empire: How Britain Made the Modern World, the Dutch East India Company “monopolised the immensely lucrative Asian spice trade.” In the early 1600s, the Dutch were – as Ferguson claimed – “at the cutting edge of capitalism” with “a stock exchange, a central bank, a stable currency” and had become “an investor’s paradise”. Dutch businessmen were creditors to their government. In Ferguson’s words, “thanks to their system of national debt, the Dutch seemed able to conjure up money out of thin air.” This helped finance Dutch expansion in Asia. English attempts to challenge the Dutch “led to conflict”. The Dutch and the English fought three wars over the trade routes.
The central issue – as Ferguson notes – was this: “the Dutch, despite having the smaller economy, could afford a bigger and better navy thanks to their sophisticated financial system.” In this context, “a powerful group of English aristocrats, backed by the merchants of the City of London, invited the Dutchman William of Orange to invade their country.” The context was to overthrow a Catholic king and cement parliament’s authority. But rather than politics or religion, Ferguson claimed what the English “could learn from the Dutch was modern finance”. As Ferguson claimed, “the English became, in effect, the super Dutch”.
These English merchants knew what England lacked and so invited their competitors in without actually relinquishing power. The Dutch state never took over England, Scotland and Ireland. Dutch never became the national language, nor did widespread immigration from the Netherlands ever take place. Instead the English learned from the masters. Could Britain do the same today? One of the great criticisms of Brexiteers is the charge of nativism and a general closed mindedness to the world. What better way to counter that than by inviting the world in? Forget mere people immigration. We are talking about corporate immigration.
Constantly we are told that (currently) overseas companies oppose the UK leaving the EU. But what if some of those companies became British? What if the UK became so attractive to a currently overseas company that it would rather be registered in – and operate in – the UK, rather than its current jurisdiction? Before dismissing the idea, British industrial business Dyson recently announced a move to Singapore. Yes, we know the issue about being shut out of the European market (and Dyson cited proximity to Asia as a key motivating factor), although that seems extremely unlikely to happen. Moreover, the experts may well be wrong about the centre of economic gravity shifting to Asia. So, what if the UK could build such an attractive business environment – not just for headquartering companies but for operating in the UK – that these currently overseas companies simply could not refuse the offer?
Today, German Mittelstand companies are suffering succession problems. Many are eyed up by private equity firms in London and New York. Harness the industrial prowess of currently overseas companies to the financial might of the City – as well as the hotbed of innovation at Britain’s top universities – and what do you have?
Don’t say Britain would lack the workers – Mittelstand companies can’t find the workers where they are! As reported by Olaf Storbeck in the Financial Times, “60 per cent of German companies regard skill shortages as a threat to their economic performance, compared with just 16 per cent eight years ago, according to a survey of the Association of German Chambers of Commerce and Industry.”
Don’t say taxes and regulations! We all know that is not the EU’s advantage. The UK remains globally competitive – it currently ranks seventh in the world for economic freedom and eighth in the world in ease of doing business. Meanwhile capital is mobile. Of course, it costs money to set up somewhere else. There would have to be incentives. But is that beyond Britain? The UK will buy foreign industrial products regardless. Why not buy them when more of the companies which make them are registered (and more of them are made) in the UK?
While the Reformation has parallels with Brexit, the Glorious Revolution may well be the example for Britain after Brexit. The UK barely scratches the surface of its potential. Forget merely attracting engineers or developers to make the UK their home. Attract companies to make the UK their home.
We are not just talking about a plant here and a distribution centre there. We are talking about something far more ambitious. The UK seeks foreign direct investment anyway so why not take the next logical step? One may argue the UK doesn’t have the market the EU has. Well firstly, who knows how long the EU can hold together? If it isn’t split south-by-north, it could well be split east- by-west. History is full of events which were never going to happen.
Secondly, will the EU really want to shut the UK out? Finally, maybe this is where CANZUK – with its colossal growth potential – comes in? Assuming Brexit is now unstoppable, what exactly does the UK have to lose? Maybe the world would laugh at Britain for having the audacity to undertake such a bold move. But he who laughs last, laughs best. For post-Brexit Britain, there is simply no room left for small thinking.
Jonathan Saxty is a businessman based in London. Educated at LSE and Cambridge, and called to the Bar as a double scholar at Lincoln’s Inn, he is an entrepreneur with a passion for improving peoples’ lives. Jonathan’s particular area of interest is Britain’s long–term geopolitical and economic future after Brexit.
 Niall Ferguson: Empire, How Britain Made the Modern World