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Patient Capital

Theresa May, the UK Prime Minister, addressed the Confederation of British Industry (CBI) Conference in London this morning.  Speaking after her Business Secretary, Greg Clark, had warmed up the audience by reassuring them that Britain was going to be the most competitive country in the world and the location of choice for businesses national and international, Mrs May gave a few hints as to how this government aims to meet those objectives while conducting a gentle U-turn on worker representation on company boards.

In her early days at Number Ten, she was full of righteous indignation at the treatment of staff on zero hour contracts [1] and vigorously in favour of forcing companies to accept employee representatives on their boards. [2] This proposal, and another, to oblige employers to report the number of foreign personnel working in their companies, [3] has caused the Prime Minister to be described as anti-business.

Today, in contrast, she said that, while the government encourages them to do so, it remains the choice of individual companies whether they invite employees on to their boards.  This was probably a gesture towards calming markets that are already suffering from Brexit uncertainty.  If so, it has had the desired effect: the FTSE 100 cheered up immediately, rising almost half a point within the hour following her speech.

Other assurances ranged from the financial, through the geographical to the educational.  Tax breaks will be available for innovation and money has been set aside to boost science, research and development, the economy is to become less focused on London and more emphasis will be placed on STEM (Science, Technology, Engineering and Mathematics) in the National Curriculum.  These are all elements of the strategy for dealing with Britain’s “underlying weaknesses” and key to the competitive future that Mr Clark referred to earlier on.

Assistance will be available for small businesses.  Sir David Connell, a Cambridge University luminary has been appointed to investigate what matters to them and help will be provided for “start-ups to scale up”.

Finance for all these measures will be made available with the help of “patient capital”, not a reference to the UK business climate needing intensive care but a term that is used to describe the long-term nature of the investment required.  This investment programme will be reviewed and overseen by a private equity veteran, Sir Damon Ruffini of Permira.

It was a morning of positive promises of reform and opportunities from the government and a plea, in exchange, for the business community to work together and to “keep the faith.”

[1] Theresa May paves way for self-employed and temporary workers to be protected by new laws
[2] Theresa May’s plan to put workers on boards is borrowed from Germany and France
[3] Theresa May Backs Amber Rudd’s Plans To Make Companies List Their Foreign Workers