Brexit Has Challenged UK Companies, Business Secretary Says

(Bloomberg) — Business Secretary Grant Shapps said Brexit has caused “significant challenges” for UK business as he laid out a plan for growth that he described as “Silicon Valley with a British edge.”

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The UK has a natural advantage in technology and finance and aims to use that combination to drive innovation and scale up new businesses, Shapps said on Thursday in a speech at a business leaders’ lunch on the fringes of the World Economic Forum’s annual meeting in Davos , Switzerland

The business secretary sought to counter criticism from business figures and opposition politicians that Prime Minister Rishi Sunak’s government lacks a growth strategy, telling his audience that the premier “is unequivocal in his commitment to growth,” Shapps said.

The focus of Sunak’s administration — in office for less than three months — so far has been to stabilize the economy after his predecessor, Liz Truss, roiled the financial markets with a set of unfunded tax cuts. And with Shapps’s speech short on policy detail, two business leaders who asked not to be named said it had done little to reassure them.

Addressing the challenges caused by Brexit, Shapps said he had voted to remain in the European Union “largely because I thought it was a huge hassle to leave.” But he also said that “Brexit freedoms” provide an opportunity for the UK to “reap the benefits” of more agile regulation.

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He promised the UK would remain an open economy where new and growing businesses flourished and Britain would become a leader in the so-called fourth industrial revolution.

“We produce more trillion-dollar unicorn startups than France, Germany and the Netherlands put together,” Shapps said. “But why do so many companies move abroad after being nurtured in the UK? There is a lot we can learn from Silicon Valley.”

The UK should also learn from the US technology hub’s mistakes, he added.

“Its unicorns sometimes prioritize shareholder value above all else; its culture sometimes falls short of the standards we expect from employers. And while it has made some people unimaginably rich, the wealth isn’t shared by everyone — with homelessness in nearby San Francisco a very visible sign of this inequality.”

Shapps said his vision is for scale-up Britain with “global ambitions to lead the tech market and improve the world.”

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