Government’s secret post-Brexit plan must rule out the Singapore model

There are plans under discussion in Whitehall to cope with the long-term consequences of a no-deal Brexit. Dubbed Project After, these plans involve Whitehall officials poring over the government’s entire portfolio of tax and spending commitments and how they might be adjusted once the UK tumbles out of the European Union’s single market and tariff-free customs area.

Civil servants operating under the watchful eye of cabinet secretary Mark Sedwill are also examining reforms to the regulatory landscape and, separately, how they might put a rocket under what currently passes for a policy to encourage businesses to locate in Britain’s economic hinterlands.

No 10 has kept Project After under wraps and little is known about any conclusions that might have been drawn. The theme, we know, centres on encouraging companies that might otherwise depart these shores to stay, and encouraging fresh investment from businesses nervous about setting up shop in a newly outcast UK.

When the project was first given the green light, in the weeks after the referendum vote, the common thread was Singapore’s regime of low taxes and light-touch regulation.

Tory Brexiters were in the driving seat and argued strongly for cuts to business taxes, more tax breaks for investment and lower capital gains taxes on wealth to mimic the south-east Asian city state.

A bonfire of employment laws and “useless” health and safety regulations was called for, along with a relaxation of private company financial reporting to protect entrepreneurs from prying eyes.

As it happens, Sir James Dyson sought out this package of business-friendly measures before deciding where to build his first electric car. Not surprisingly, he picked Singapore ahead of the UK.

Tory Brexiters, judging by recent coverage of Project After, remain convinced that the government’s agenda favours cuts to taxes and regulations as the route to winning over businesses like Dyson’s.

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However, Theresa May has pursued a very different tack since her proposed Brexit deal was heavily defeated in the Commons. Far from sticking with a free-market agenda, she has moved to the centre ground, putting forward proposals for a more activist government to support business investment and promote the regions.

May has sought to enhance worker protections, while the environment secretary, Michael Gove, has said he plans to put in place tougher rules for food safety and environmental protections. The idea he would water them down is ridiculous, Gove says.

The head of Siemens UK, Jürgen Maier, has spent months watching intently to see what kind of post-Brexit landscape the government wishes to create to promote business and jobs.

He is pessimistic about ministers arriving at a coherent plan, though, whichever route is picked. With free-marketers like Jacob Rees-Mogg on the one hand calling for measures that mimic Singapore, and one-nation Tories on the other calling for more collaboration between unions, businesses and the state, May’s government is as hopelessly divided over its industrial strategy as it is over Brexit.

It is understandable that May’s inability to see off Rees-Mogg and his supporters over Brexit fuels concerns that she hasn’t ruled out joining a race to the bottom with Singapore on tax and regulations.

For that reason alone she should instruct Sedwill and his team to publish the results of their deliberations and show that at least one arm of government has a straightforward and reasoned plan. An emergency cut to VAT and a reduction in interest rates by the Bank of England will be welcome in the wake of no-deal, but not sufficient.

Ryanair may be changing. But O’Leary is not going anywhere

As seasons pass with barely a penny-pinching stunt, it’s tempting to conclude that Michael O’Leary’s heart is just not in it any more. But Ryanair has signed him up for five more years, during which he will step back from the day-to-day and steer a group of subsidiaries, including the spawn of Brexit, Ryanair UK.

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O’Leary described the plan as an IAG-like structure – perhaps to dispel any idea that he was being kicked upstairs, rather than retaining the kind of control rival Willie Walsh exerts at British Airways and sister airlines. However, it still appears something of a shift for a man who would not just monitor every bean but was the unfriendly face of Ryanair. For some analysts, the news represents welcome stability, but concern over how the airline is run continues to fester, despite the softer sell, overhauled digital operation and ever-growing passenger numbers.

Shareholder dissatisfaction has triggered an end for chairman and long-time O’Leary ally David Bonderman, but investors have indicated that the changes don’t go far enough. In a week when another national irritant, BBC presenter John Humphrys, concluded he’d hung around too long, might O’Leary come to a similar conclusion?

Despite having been in at the dawn of low-cost flying in Europe, he is only 57. When his mentor, Southwest Airlines founder Herb Kelleher, died last month, O’Leary described him as the “Grand Master Yoda of low-fare airlines”, which would cast O’Leary as Luke Skywalker, the youthful acolyte turned grizzled Jedi stewing on a remote Irish outcrop. Few of his staff might have cast O’Leary as that particular Star Wars character. But either way, O’Leary looks to have now repositioned himself to play a role in the battle of the skies for some time yet.

Twitter has won credit by ditching fake accounts. But investors still don’t like it

Twitter must be wondering what it has to do to impress investors. The social media company’s share price fell by almost 10% last Thursday despite it comfortably beating Wall Street expectations for fourth-quarter revenue and earnings. Twitter even managed its first full-year profit since publicly listing in 2013 – $1.2bn – after reporting a $108m loss in 2017.

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Investor sentiment towards social media companies is disproportionately influenced by an obsession with user growth. And Twitter is shrinking. The company reported 321 million monthly active users, a year-on-year drop of 9 million and 5 million down on the third quarter.

The global success of Facebook – with its 1.5 billion active users – and Google has fuelled a size-matters-at-all-costs mantra in digital advertising. Twitter is seeking to change that focus to push a quality-over-quantity message and has unveiled a new metric: “monetisable” daily active users.

“Our goal was not to disclose the largest daily active user number we could,” said Twitter, taking a swipe at rivals by pointing out that its measure is far more accurate, as it only counts users it knows are actually exposed to ads.

Snapchat faces the same issue – earlier this week it saw a jump of more than 20% in the value of its stock after reporting daily active user numbers had stabilised in the fourth quarter, at 186 million, after two straight quarterly declines.

Twitter is hoping that its new focus on measuring the most commercially valuable audience will pay off. The decline in its monthly user total is due, in part, to the company taking millions of fake and suspicious accounts off its platform. This has helped restore some credibility with the public. There is still some way to go in terms of building faith among investors.


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