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Thursday, 28 June 2018

Decoupling of Business and Politics in the UK (2)

On 15 March 2018, industrial conglomerate Unilever announced scrapping its dual headquarter structure, and created a single HQ in Rotterdam, Netherlands (my blog). Both Unilever and the UK government denied any Brexit link (Guardian).

Excerpt from my 16 March blog on Unilever - decoupling of business and UK politics:
"In my concept of the 7 Belief systemsMoney sides with Politics, its natural ally. The Unilever move shows (i) a decoupling between business (ie, Money) and unpredictable and unstable UK politics, and (ii) a coupling of business with predictable and stable Dutch politics. Money prefers arrogant Globalism / Internationalism over ignorant Nationalism (my 2017 blog)."
In June 2018, other UK conglomerates warned the UK government on Brexit: AirbusBank of AmericaBMW, and Siemens. This time the UK government response was different:

The remark by the UK Foreign Secretary led the FT to conclude: "The foreign secretary’s outburst reveals commerce has lost out to nationalism". Note LO: bold markings in quote by me. This conclusion is an affirmation of my thesis about a decoupling between business and politics in the UK. Such a decoupling would have disastrous consequences.

Businesses tend to have a rational view, although some of their projects may well be based on an emotional spur of the moment. Decisions are mostly based on a risk / return trade-off, and only some are based on a gut feeling. Businesses seldom continue with disastrous projects, although they dislike communicating its consequences (eg, write-offs). Silence is golden.

There's plenty of evidence that the Brexit "project" has been run the other way around: Brexit is an emotional view without any pre-Brexit impact analysis (Guardian-2017). A subsequent post-Brexit impact analysis revealed that the "U.K. will be worse off in every scenario after Brexit" (Politico-2018). Brexit appears to be purely based on a gut feeling by some loud-voiced politicians with shady international contacts (eg, Russia, Trump).

In the rational minds of UK businesses, it's incomprehensible that UK politics would really ruin UK business through a no deal Brexit. Hence, continued disbelief and a posture of "seeing is believing". The big conglomerates in the UK now realise that time is running out for any Brexit deal. A no deal Brexit would complete the decoupling between Business and Politics in the UK.

Running on Empty (1978) by Jackson Browne

Running on, running on empty
Running on, running blind
Running on, running into the sun
But I'm running behind


Note LO: all markings (bold, italic, underling) by LO unless stated otherwise