Ex-minister says Britain likely to woo Asian business

Mr Mandelson says Britain, post-Brexit, needs Asian investment even more than it did before.
Mr Mandelson says Britain, post-Brexit, needs Asian investment even more than it did before.

The new British government is likely to roll out incentives to entice Asian businessmen to stay put in Britain even as it carves out a new life outside the EU.

This silver lining, which may help offset years of roiling uncertainty as Britain constructs a new relationship to replace its membership of the European Union, was pointed out by Lord Peter Mandelson, a former Cabinet minister, during an interview with The Straits Times on Thursday.

The great danger for Britain is that instead of waiting for clarity to emerge on the post-Brexit landscape, Asian companies decide to take their business elsewhere, said Mr Mandelson, 62, who held various Cabinet posts under Labour prime ministers Tony Blair and Gordon Brown.

Mr Mandelson, who was the European Commissioner for Trade from 2004 to 2008, was in Singapore on a business visit as chairman of the London-based strategic advisory firm Global Counsel.

"Britain needs Asian investment even more than we did before, so it is likely to be even more welcoming to Asian businesses... The government will go out of its way to provide incentives and encouragement to invest in Britain," he said.

Days after last month's Brexit vote, then Chancellor of the Exchequer George Osborne had already suggested a cut in corporation taxes to make it worthwhile to stay in Britain, he pointed out.

"The government will be thinking of a number of measures along these lines," he added.

A leading figure in the Remain campaign, Mr Mandelson said the voters' decision to leave the EU had created a huge political conundrum not faced since World War II. New Prime Minister Theresa May and her team now have to think through how living outside the EU will work in practice, he said. Further, they will need to spell out the consequences so that Britons understand what Brexit means in a way not fully appreciated before the June 23 referendum.

Mrs May could decide to stay "near-in", with full access to Europe's single market, or end up "far-out", with a narrower trading relationship, he said.

Mrs May, who supported remaining in the EU on economic grounds, has chosen to position a team of leading Brexit campaigners - Secretary of State for Exiting the EU David Davis, Foreign Secretary Boris Johnson and Secretary of State for International Trade Liam Fox - to chart what's next.

"That's going to turn out to be either a cute move or a counterproductive one," Mr Mandelson said.

"Counterproductive if they don't see reality and don't offer an honest, objective view. Cute, if she is getting the Leave campaign to finally see the facts and apply common sense... She understands what's at stake economically. The question is if she will be able to carry her colleagues with her."

Whatever path she chooses needs to be put to the public again, said Mr Mandelson, who favours a general election on the issue.

Ironically, his own Labour Party may not be in a position to capitalise in the event of an early election. Mr Mandelson deemed his party as being "without credibility or influence".

"It's not just a choice between individuals but a choice between the direction we want," he said, referring to the looming leadership contest between party chief Jeremy Corbyn and Ms Angela Eagle.

The next leadership has to come from the younger generation, said the man who, along with Mr Blair and Mr Brown, helped forge the "New Labour" that won three elections in the 1990s and 2000s.

A version of this article appeared in the print edition of The Straits Times on July 16, 2016, with the headline 'Ex-minister says Britain likely to woo Asian business'. Print Edition | Subscribe