“When Britain sneezes……” 

Who said when Britain sneezes, the world catches a cold? Strangely, it was my Economics teacher, Prof. Srinivasan, at Aquinas University College, Colombo in the early ninteen fifties.

With all goodwill in the world, British Prime Minister, Liz Truss in her recent Conservative Party Conference speech stated: “we want growth, growth and growth in Britain!”

She received a standing ovation. Within a week, things have changed, she has had to sack her Chancellor and more or less fall on her sword and appoint a new Chancellor, Jeremy Hunt who has bowed to markets and changed most of what was in the Mini Budget Statement. 

A political history lesson

But, why is it that Fridays and Britain, don’t jell? On 13 July 1962, Prime Minister Harold Macmillan dismissed 7 of his Cabinet, including his Chancellor of the Exchequer, Selwyn Lloyd and replaced him with Reginald Maudling. It was called “the Night of the Long Knives”.

In 1989 Margaret Thatcher took the side of Alan Walters, her personal Economics Advisor, who clashed with the then Chancellor, Nigel Lawson. Nigel demanded Thatcher sack Walters. Thatcher refused, Nigel resigned.

Again during John Major’s time, in the aftermath of “Black Wednesday” 16 September 1992, Norman Lamont, his Chancellor resigned seven months later in May 1993. 

What makes Chancellors in England resign? 

I can only guess, there is something potentially problematic - the connection between British Prime Ministers and their Chancellors. Chancellors in the modern era tend to define or indeed destabilise a premiership. “If the relationship goes well, the economy thrives, but if it goes wrong, it is the “Night of the Long Knives”. This is in a sense or in essence, the key in determining electoral success. 

There has been seven (7) Chancellors of the Exchequer in twelve years of Conservative Government in the UK. 

Do markets move Governments or the other way?                                              

The reason in my view for markets to turn against the Conservatives is the fear that UK cannot pay its bills after announcing a series of unfunded tax cuts. This has led investors to question where the money is coming from to fund the tax cuts, as the economy is contracting. Meanwhile, the cost of Government borrowing is soaring, again today to a twenty year high. 

A word of caution

All this is a good lesson to us not to follow the fortunes of the Brits and imitate them, as many in Sri Lanka think they should. We unashamedly did fall into the same trap as “our politicians often look to the next election, to feather their nest”. We have now learned a lesson or two to think of our next generation, if Sri Lanka is to survive as a democracy. 

I am indeed proud of the out of box thinking of Sri Lanka Tourist Board to attract world tourists to our shores during the Qatar World Cup in November this year. A “two destination bonanza” for the price of one is a brilliant idea. Even if, it is not for the price of a single destination, I know football fans from Britain, will want an escape, as the thought of a bleary winter shutting off their central heating in Britain, coupled with a sense of austerity, and would be too much to ask? 

Thank you to both Qatar and Russia for their out of the box thinking, to send us tourists; “sell us tourists,” and the oil to drive our vehicles to attract them.  Perhaps, flooding our shores with tourists from the Siberian winter temperatures, wanting a “welcome spot” to ease their war weariness, is a win-win situation. 

Victor Cherubim