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Airbus Execs Say Company May Leave the UK in a ‘Hard Brexit’ Scenario
The most obvious thing in the world has finally occurred and the only surprise is that it took so long!
Yesterday, Airbus said it would “reconsider its footprint in the country, its investments in the UK and its dependency on the UK,” and further stated that if Britain crashed out of the EU without a trade deal it would entail an “extremely negative outcome for Airbus,” and “would be catastrophic,” etc., etc.,
Certainly, UK Prime Minister Theresa May has said many times that she doesn’t intend on crashing out of the EU without a trade deal and she and her Cabinet have devoted much time and effort towards obtaining a deal.
Whether the EU side has reciprocated in that drive for a deal is another matter. Many of us understand the reason as some in the EU have hurt feelings, and still to this day some continental politicians can’t understand why the UK is leaving and why more than 17-million voters chose to leave the European Union.
Regardless, the UK is leaving. Of that there is no doubt.
If the EU and Airbus want to continue to sell aircraft to the UK they will continue to operate their facilities throughout the UK with no substantive changes.
But if they do leave, it presents an enormous opportunity for the government and companies in the United Kingdom to purchase Airbus properties in Northern Ireland and in Britain to create a homegrown aircraft manufacturer.
When Someone Wants to Leave, Do Yourself a Favour and Let Them Leave (on good terms)
Whether it’s a marriage, a business partnership, or a foreign manufacturer wanting to pull up stakes — do yourself a favour and let them go.
If you stop them from leaving it’s only temporary anyway! So cut your losses and move on brave souls.
There’s plenty to be said about helping them pack and in engaging in some polite small talk until they’re out the door.
Then, as soon as their gone, pull out a blank sheet of paper and design the domestic aircraft manufacturer of your dreams — and get on with it every day until it’s done!
That’s how you get onto the good stuff and prevent yourself from getting bogged down in anger, self-doubt, recriminations, and what-if scenarios. That stuff will drive you bonkers!
Which is why Theresa May needs to take the bull by the horns and politely inquire as to the asking price of all of the Airbus manufacturing facilities which are scattered all over Britain and Northern Ireland — and buy-out Airbus (UK assets only) ASAP.
It’s no time to be a wallflower, it’s time to create a domestic aircraft manufacturer, par excellence!
One that will create just as many (or more) jobs in the UK as Airbus.
Nationalize Airbus, With Intent to Sell
Nationalizing Airbus throughout the UK would cost a few billion, sure, but investors from all over the world would want to get in on THAT IPO!
Commonwealth countries — which make up 2.5 billion people — should be offered ‘first dibs’ on such an IPO to guarantee their participation in that new company, and to help ensure they will choose to order aircraft from that new entity.
The astonishing success story of Airbus, of Bombardier in Canada, and Brazil’s Embraer all point to the success that a UK airline manufacturer could enjoy (assuming the right management team of course) which could also produce their own ‘joint fighter’ and ‘joint bomber’ jets for Commonwealth and developing countries.
Canada could be tapped to produce the landing gear (for example) while Australia and New Zealand could build many of the components for the aircraft, while items with high labour costs (like sheet metal) could be manufactured in India, and seats and luggage bins could be made in Commonwealth nations in Africa and the Caribbean — and all of it shipped to the UK for final assembly and flight testing.
It really comes down to which Commonwealth country can build the best seats, or the best wings, etc., and then simply arrange a build plan around those capabilities.
‘Canada, what can you build better, cheaper, and faster, than any other Commonwealth nation to add to the new [enter name of aircraft here] and deliver it to us for final assembly on a timely basis?’ That’s how you approach each Commonwealth country.
Once the IPO has raised sufficient capital, the UK government could then sell it to that (primarily Commonwealth) investor group.
Not Only Will UK Airbus Jobs Be Saved, But an Entire Commonwealth-wide Aviation Industry Will Have Been Created!
Which is another way of saying; ‘Thank you, Airbus. I love you, and I will always remember you fondly.”
Once Brexit occurs, UK companies and citizens will no longer have the luxury of coasting along like snowflakes caught in a gentle breeze; Rather, UK citizens will need to ‘Man-up’ or ‘Woman-up’ (as the case may be) to rebuild the country into all that it could’ve and should’ve been, all along!
From now on gentle Britons, it’s sink or swim, win or lose, own or be owned… decide how you want to spend the next 50-years.
A great way to start is for the UK government to automatically nationalize every company that wants to pull out of the UK, hold it for up to 6-months, and then sell it to any appropriate investor group that has strong UK and Commonwealth connections and looks viable enough to pull it off in style.
That’s how you ‘Build a Better Britain’ Theresa May!
Few things are as useful to countries as membership in a progressive organization with business links around the world.
For the 53 Commonwealth of Nations members meeting in London this week it’s a chance to discuss ideas, policies, united positions on global or regional affairs, to learn from the experiences of other member nations, and to pursue trade opportunities.
As Britain leaves the European Union by April 2019, Commonwealth of Nations members will discover evermore trade opportunities throughout the United Kingdom. And that trade must work both ways. Countries that allow the UK to export to their country should be encouraged to sell their goods and services to the United Kingdom; making Brexit a ‘Win-Win’ for all Commonwealth member nations.
After Brexit, two-way trade between the UK and EU is expected to drop by a few percentage points (this is normal and not to be feared) however, Commonwealth nations should expect to receive all of that two-way trade availability — and every expectation is that UK and Commonwealth leaders will surpass that low-ish standard.
Further, with restraints removed, the UK will be positioned to negotiate bilateral trade deals with every member of the bloc which should result in a surge of economic activity for every member nation.
Long before it was fashionable for world governments to support equality between people and groups in a society, Commonwealth leaders created the Commonwealth Charter with its sixteen shared principles which include democracy, human rights, freedom of expression, sustainable development, and racial and gender equality, together forming the foundation of the Commonwealth’s constitution.
Prior to 2012, the London Declaration guided the Commonwealth and proved that nations with different capacities and capabilities could work together for mutual benefit, simply by agreeing on shared goals and principles.
Going forward, member nations continue to improve standards and adherence to their principles thereby setting a unique example in national social dynamics to the world.
Like many developed nations, UK companies require plenty of low-cost labourers to harvest crops, to work on production lines, and as general labourers on construction projects.
After Brexit, the UK will be able to source a much larger percentage of labourers from Commonwealth nations as the customs agreement with the EU expires.
This could provide tens of thousands of opportunities annually for citizens of the Commonwealth who want to travel and work in the UK — even if it’s only during specific times of year that farmers require additional labourers — who would then return to their home country with their earnings at the end of the season.
During a period of massive construction projects, the same applies; Tens of thousands of workers could relocate to the UK to work in the construction industry and receive a temporary worker permit allowing them to stay in the country and pay taxes for as long as the contractor requires them. At project conclusion those workers could return to their country with thousands of pounds sterling in their pocket.
Such foreign workers should be required to provide a letter from their local police proving they aren’t wanted on criminal charges, a letter from their bank asserting they have sufficient funds to purchase a return airfare ticket (so they don’t get stranded in the UK when their employment ends) and they should be required to pay the Home Office £100 for every year or portion of a year they stay in the UK.
London is the financial capital of the world and is the ‘go-to’ stock exchange for IPO’s, for mature industries with financing needs, and is the most prestigious exchange on which to list Commonwealth companies.
Once Brexit occurs, billions more in FDI should be flowing from the UK to Commonwealth nations, which should always be the first choice for UK foreign investment.
Special arrangements should be made for individuals and businesses in Commonwealth nations to access UK banks within their home country prior to travelling to Britain.
I will use ‘Barclays’ to make an easy example:
- Barclays (a global bank headquartered in London) should be required to maintain at least one branch in every major city throughout the Commonwealth, in exchange for a reasonable tax advantage.
- For workers wanting to work in the UK who must first apply for a worker’s visa, who must first pay the £100 annual fee to reside in the UK, who must first obtain a letter of credit from the bank proving they have sufficient funds for return airfare, and who must first attach a criminal records check letter to their application to the Home Office — such workers should be able to do it all at the Barclays branch and have all the information electronically transmitted to the appropriate Home Office desk and receive confirmation from the Home Office in the time it takes to sip a coffee.
- For companies that want to import from or export to the UK; the commercial side of the Barclays branch should be set up to enthusiastically assist business owners with every aspect of importing or exporting anywhere within the Commonwealth. Such business owners need only visit a Barclays branch with the idea in hand, and should expect to leave the branch an hour later with every single step completed and be fully informed on every relevant regulation and practice so they can begin importing or exporting the very next day.
- Companies that need financing within their own Commonwealth country — regardless of whether they intend to import from or export to the UK at that exact point in time — should feel that Barclays is always their first choice for financing, for assistance to list on the LSE, or to go public with an IPO offering. Every related thing must be easily done at Barclays in the absolute minimum timeframe — before that business walks out the door, possibly to a non-UK bank, and possibly for good.
- If non-Commonwealth banks offer better personal or business financing, better import and export assistance, better stock exchange listing expertise, better IPO experience and support, then the UK economy and banking sector will suffer by not being in the right place at the right time with the right tools to capture that business. And that would be deeply embarrassing for the United Kingdom — a developed nation with deep and historical roots across the Commonwealth of Nations.
The UK has much to offer the rest of the Commonwealth especially when it comes to mutual aid; whether military aid during internal or external conflict, or civilian aid during natural disasters, and by working together, individual member nations can be more successful than trying to accomplish such operations alone.
Royal Navy ships for example, could automatically become available for sale to Commonwealth nations at any time past the 6-year mark — at a significant savings when compared to purchasing new ships of equal size and capability.
During national emergencies in member nations, the UK should deploy significant resources to aid those nations. India too, has a sizeable military that could work joint operations with the Royal Navy to assist Commonwealth nations in peril.
Working together on military missions and aid projects, member countries will be able to prove with clearly defined examples of mutual aid, how synergy is the most valuable aspect of membership.
The Commonwealth in the post-Brexit timeframe should become 100-times more dynamic than it has been.
For as long as the UK has been shackled to EU regulations it’s been a tough go for the bloc, but much has been accomplished. Yet, there is so much potential!
With 2.5 billion citizens living in Commonwealth nations, most of whom are young and will need to purchase many goods and services throughout their lifetimes, it’s an exciting time for the UK to be re-engaging wholeheartedly with the rest of the membership.
“Sixty percent of the Commonwealth is under the age of 30.” — HRH Prince Harry’s address to Commonwealth Heads of Government Meeting in London, April 16, 2018.
The reinvigorated Commonwealth is going to out-succeed every country and bloc (and not only in combined GDP growth) but in Trade, Social Issues, Immigration, Investment, and importantly, in Mutual Aid — serving to showcase the kind of synergy that’s possible between nations for the balance of the 21st-century.
Time is running down on the Brexit clock (399 days and counting!) and the default path seems the only way that will allow a smooth and orderly Brexit in any sort of timeframe that could be construed as reasonable to British voters.
If the UK government chooses to simply photocopy existing EU trade regulations and then change those laws incrementally over a period of years, the UK should rightly expect to be invited by the European Union to continue their mutually beneficial trade relationship.
After all, how could the EU possibly be upset that the UK will voluntarily continue to follow European Union trade regulations in the pre-Brexit period?
However, this implies that until Brexit actually occurs, the UK will be obligated to consult with the EU on every incremental change made on those photocopied laws and regulations from now until the UK officially leaves the European Union on March 29, 2019. It’s not about polite diplomatic behavior, it’s about pragmatic self-interest.
The UK must begin today to re-prove that it intends — in all cases — to be a fair and reliable trading partner with the EU, and other countries are sure to be watching as this process unfolds. No amount of effort can be spared in this regard, because as so goes the UK trading relationship with the EU, so it will go between Britain and every other country in the world, after Brexit.
Trade After Brexit
Once March 29, 2019 has passed and the UK has officially left the European Union there will be no longer be any requirement for lengthy consultations with the EU on changes to British trade laws or regulations far in advance of them coming into effect.
That doesn’t mean that the UK shouldn’t continue to consult with the EU, it means that it doesn’t need to consult with the EU during the entire policy formation period. But once UK policy has been decided, the EU should continue to be the first to know about pending changes due to the bloc’s importance to the British economy.
As above, no effort should be spared in showing the EU every possible courtesy on even the most incremental of trade policy adjustments under consideration in the pre-Brexit timeframe.
And in the post-Brexit timeframe, a high level of communication and consultation must continue to define the relationship between the two sides.
Customs Law After Brexit
Unlike trade, the present customs union will end the day after Brexit which will be a very positive thing for the UK. After Brexit, the UK alone will be fully in charge of who can and can’t enter the country, and it should mount a Herculean effort now to identify and locate every single foreigner in the country, matching them to their home and workplace (or school) address.
Every non-British born resident in the country should be required to pay 100 pounds sterling per year, and also be required to provide their updated home and work/school address as often as it changes, no matter which country they originally hailed from. It’s the 21st century(!) all of this can be done on a UK.gov webform in less than 10 minutes per year.
Especially for those foreigners living in the United Kingdom anytime prior to Brexit day, the UK government should make the entire process as streamlined as possible.
Commonwealth Nations in the post-Brexit Timeframe
As the UK returns to its Commonwealth roots, immigration to the UK should thenceforth be sourced from Commonwealth nations.
Of course, there will always be a number of immigrants from the EU, America, and other countries. But as much as possible, the focus should be on the ‘all for one and one for all’ approach of Commonwealth nations — and one great way to keep that viable is by sourcing 2/3rds of the UK’s immigration requirements from the Commonwealth.
In addition, the UK should continue to spend .7 per cent of GDP on foreign aid — but spend it in Commonwealth nations exclusively.
This means that the British government must find other nations to take over its existing foreign aid commitments in non-Commonwealth nations so that Britain can concentrate on building a better Commonwealth.
Done right, every pound sterling spent in Commonwealth foreign aid should return a minimum of two pounds sterling to the UK, as a rising tide in a finite environment like the Commonwealth will lift all boats, which is quite unlike spending that same amount of foreign aid in the wider world.
One example of how Britain could benefit in the post-Brexit timeframe with a policy that favours Commonwealth nations is that UK universities, colleges and trade schools should see a vast increase in enrollment from the 2 billion citizens of Commonwealth nations.
Time is Tight
Although Brexit once seemed far-off, time is getting a little tight. Much needs to be accomplished in the remaining 399 days until Brexit.
The best way to do that is to harmonize UK trade law with EU trade law and then make incremental changes over time. That’s how not to lose.
How to win is to engage with Commonwealth nations as never before in ways that work to benefit both the United Kingdom and every Commonwealth member nation.
Keeping our EU friendships healthy on the one hand while updating our Commonwealth friendships for the 21st century on the other hand, is irrevocably in Britain’s best interests, thereby creating a new paradigm that will allow the UK to work to its strengths over the next 100 years.